Legislative Process and Appropriations
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Questions and Answers

What distinguishes an appropriation from an entitlement?

  • Appropriations are automatic, entitlements require approval.
  • Both require legislative approval.
  • Entitlements apply to corporations, appropriations apply to individuals.
  • Entitlements are automatic, appropriations require approval. (correct)

    • A central bank can only monetize assets created by itself.

    False

    What is the primary function of a bank of issue?

    To make loans by printing currency backed by assets.

    An appropriation is approved by __________ each time.

    <p>legislators</p> Signup and view all the answers

    Which of the following practices can lead to decreased accountability for government spending?

    <p>Tax credits</p> Signup and view all the answers

    Match the types of banks with their descriptions:

    <p>Bank = Takes deposits and makes loans Bank of Issue = Prints currency backed by loans Central Bank = Monetizes assets for commercial banks Commercial Bank = Provides retail banking services to consumers</p> Signup and view all the answers

    Tax expenditures increase the complexity and costs of administration in tax policy.

    <p>True</p> Signup and view all the answers

    What role does a central bank play in relation to commercial banks?

    <p>It functions as a bank for banks, monetizing assets for them.</p> Signup and view all the answers

    What does the Capital Credit Reinsurance Corporation (CCRC) provide insurance for?

    <p>Loans discounted by the Federal Reserve</p> Signup and view all the answers

    The Capital Homestead Act allows individuals to accumulate assets without tax implications.

    <p>True</p> Signup and view all the answers

    What type of accounts does Capital Homesteading create for its participants?

    <p>Capital Homestead Accounts</p> Signup and view all the answers

    Under Capital Homesteading, each citizen can receive annual allocations of __________ credit.

    <p>interest-free</p> Signup and view all the answers

    Match the following concepts with their descriptions:

    <p>Capitalism = Economic system where a few own the majority of assets Charity = Act of giving based on compassion Capital Homestead = Wealth accumulation through owned capital Just Third Way = A socio-economic alternative to traditional capitalism</p> Signup and view all the answers

    What is the main aim of the Capital Homestead Act?

    <p>To facilitate universal access to capital asset ownership</p> Signup and view all the answers

    According to binary economists, capitalism and socialism are seen as the only two socio-economic systems.

    <p>False</p> Signup and view all the answers

    What does the principle of justice advocate for in contrast to charity?

    <p>To each according to his contribution</p> Signup and view all the answers

    The __________ Exemption allows capital homesteaders to accumulate assets tax-free.

    <p>Capital Homestead</p> Signup and view all the answers

    Match the following economic concepts with their proponents or definitions:

    <p>Louis Kelso = Pioneer of universal capitalism Democratic capitalism = Combination of democracy and economic power Mercantilism = Historical economic system with centralized control Charity = Virtue of loving one's neighbor</p> Signup and view all the answers

    How is capital defined in the context of capitalism?

    <p>As the predominant factor of production</p> Signup and view all the answers

    Charity can be considered a substitute for justice in economic distribution.

    <p>False</p> Signup and view all the answers

    What was the former name of the Capital Homestead Act?

    <p>Industrial Homestead Act</p> Signup and view all the answers

    Charity reflects the principle of distribution 'to each according to his __________.'

    <p>need</p> Signup and view all the answers

    Match the following economic terms with their implications:

    <p>Capitalism = Concentration of wealth and power Universal capitalism = Broad ownership of capital Free markets = Unfettered trade and competition Plutocracy = Government influenced by wealth</p> Signup and view all the answers

    What is the primary role of a commercial bank?

    <p>To facilitate economic transactions by taking deposits and making loans.</p> Signup and view all the answers

    The Federal Reserve Banks are permitted to discount personal loans from the general public.

    <p>False</p> Signup and view all the answers

    In binary economics, what are the two components of productive output?

    <p>Human labor and capital.</p> Signup and view all the answers

    The institution that provides Capital Homestead credit insurance is called __________.

    <p>Capital Credit Insurance Corporation (CCIC).</p> Signup and view all the answers

    Which principle believes that economies grow as capital ownership is distributed more broadly?

    <p>Binary Growth</p> Signup and view all the answers

    Binary economics assumes that scarcity is inevitable.

    <p>False</p> Signup and view all the answers

    What is a barrier in binary economics?

    <p>Anything that inhibits full participation in the economic process.</p> Signup and view all the answers

    A financial institution that acts as a middleman between the issuer of a security and the purchaser is called a(n) __________ bank.

    <p>investment.</p> Signup and view all the answers

    What is the focus of binary productiveness?

    <p>The increasing contribution of capital assets</p> Signup and view all the answers

    What role should the state play according to binary economics?

    <p>Limit economic power and eliminate special privileges.</p> Signup and view all the answers

    What does the Capital Credit Corporation (CCC) aim to promote?

    <p>Capital ownership among all citizens.</p> Signup and view all the answers

    The Federal Reserve treats insured, dividend-backed CHA securities as it does __________.

    <p>government debt paper.</p> Signup and view all the answers

    Match the following concepts with their definitions:

    <p>Binary Growth = Economies grow as capital ownership is more distributed. Binary Productiveness = Capital assets are increasingly contributing to economic growth. Binary Property Right = Right to acquire private ownership of wealth-creating capital assets.</p> Signup and view all the answers

    In binary economics, market principles dictate the acquisition of private wealth-creating capital.

    <p>True</p> Signup and view all the answers

    What does binary economics reject in terms of market assumptions?

    <p>Pure laissez-faire assumptions.</p> Signup and view all the answers

    What type of credit is designed for financing projects that generate income to repay the loan?

    <p>Capital Credit</p> Signup and view all the answers

    Under proper conditions, a shareholder may make a personal claim on specific corporate assets.

    <p>False</p> Signup and view all the answers

    What is the primary drawback of corporations mentioned in the content?

    <p>Growing abuses by those who manage and control them.</p> Signup and view all the answers

    A loan that does not involve existing savings and where no interest is due is called __________.

    <p>Interest-Free Credit</p> Signup and view all the answers

    Match the types of credit with their descriptions:

    <p>Capital Credit = Funds lent for profitable projects Consumer Credit = Funds lent for non-income generating goods Pure Credit = Interest-free loans for feasible productive projects Non-Recourse Credit = Loans secured by the assets behind the loan</p> Signup and view all the answers

    Which term describes loans expected to cover costs from future profits?

    <p>Self-Liquidating Credit</p> Signup and view all the answers

    The consumer credit is used for financing goods and services that can pay for themselves.

    <p>False</p> Signup and view all the answers

    What is a potential solution to overcome drawbacks in corporate performance?

    <p>Democratizing corporate accountability and increasing dividend distributions.</p> Signup and view all the answers

    Loans that do not expose borrowers to personal asset seizure in case of default are known as __________.

    <p>Non-Recourse Loans</p> Signup and view all the answers

    Which of the following terms refers to a loan that is expected to be repaid through future profits?

    <p>Self-Liquidating Credit</p> Signup and view all the answers

    Credit, Pure extends the idea of enabling people without savings to own capital.

    <p>True</p> Signup and view all the answers

    What distinguishes Pure Credit from conventional credit?

    <p>Pure Credit does not charge interest and revolves around productive projects.</p> Signup and view all the answers

    The aggregate of all charges associated with the production of goods and services is referred to as __________.

    <p>Cost</p> Signup and view all the answers

    Match the credit types with their characteristics:

    <p>Credit, Consumer = Funds for goods that do not pay for themselves Credit, Non-Recourse = Personal assets are safe from seizure on default Credit, Interest-Free = Loans made without charging interest Credit, Self-Liquidating = Loans that are repaid by future profits</p> Signup and view all the answers

    What does the term 'discounting' primarily refer to in the context of loans?

    <p>Receiving less than face value for loans</p> Signup and view all the answers

    Dividends must be proposed and approved by the Board of Directors in a corporation.

    <p>True</p> Signup and view all the answers

    Who proposed the economic system known as Distributism?

    <p>G. K. Chesterton and Hilaire Belloc</p> Signup and view all the answers

    The interest rate charged between commercial banks for overnight loans is known as the __________.

    <p>Federal Funds Rate</p> Signup and view all the answers

    What constitutes 'bad' uses of credit under Capital Homesteading?

    <p>Financing nonproductive consumer and government debt</p> Signup and view all the answers

    Match the terms with their definitions:

    <p>Dividends = Profits distributed to shareholders ESAP = Employee benefit plan for share accumulation Entitlement = Automatic allocation of government funds Federal Reserve System = Central banking system of the U.S.</p> Signup and view all the answers

    The discount window is only available to individual consumers for personal loans.

    <p>False</p> Signup and view all the answers

    What is the primary aim of Distributism?

    <p>To ensure widely distributed ownership of productive assets</p> Signup and view all the answers

    Employee Stock Ownership Plans (ESOP) require employees to use their own savings to acquire shares.

    <p>False</p> Signup and view all the answers

    What is the primary function of the Discount Window?

    <p>To allow central banks to purchase qualified loans from commercial banks.</p> Signup and view all the answers

    What does the highest form of charity according to Moses Maimonides enable a poor individual to do?

    <p>Lift themselves out of poverty</p> Signup and view all the answers

    What does the term 'ephemeralization' describe?

    <p>The process of doing more with less</p> Signup and view all the answers

    Credit generated for feasible business projects under Capital Homesteading is __________ through the discount mechanism.

    <p>interest-free</p> Signup and view all the answers

    What type of markets do customer stock ownership plans (CSOP) help create?

    <p>Internal market for repurchasing shares</p> Signup and view all the answers

    Social charity seeks to destroy ineffective institutions.

    <p>False</p> Signup and view all the answers

    The service fee charged by the Federal Reserve to member banks is known as the __________.

    <p>discount rate</p> Signup and view all the answers

    Deflation is characterized by an increase in the amount of money chasing goods and services.

    <p>False</p> Signup and view all the answers

    What is the main purpose of the Citizens Land Bank (CLB)?

    <p>To enable citizen-shareholders to gain ownership interest in local real estate.</p> Signup and view all the answers

    Match the types of plans with their descriptions:

    <p>ESAP = Plan for employee share accumulation without full voting rights ESOP = Retirement plan that allows borrowing for shares Capital Homesteading = Policy for full distribution of dividends Federal Reserve Act = Legislation establishing the central bank of the U.S.</p> Signup and view all the answers

    What do demand deposits represent?

    <p>Bank deposits subject to checking on demand.</p> Signup and view all the answers

    What is the primary monetary objective of the Federal Reserve System today?

    <p>Controlling inflation and maintaining currency value</p> Signup and view all the answers

    The economic system where personal ownership of production is denied is called __________.

    <p>collectivism</p> Signup and view all the answers

    The percentage charged by the central bank to cover its costs in monetizing loans is known as the __________ rate.

    <p>discount</p> Signup and view all the answers

    Capital Homesteading provides credit and tax incentives to companies with Employee Stock Ownership Plans (ESOPs).

    <p>True</p> Signup and view all the answers

    Match the following terms with their descriptions:

    <p>Citizens Land Cooperative = An expanded ownership mechanism for land planning Chicago Plan = Proposal for a 100% reserve requirement Community Development Corporation = Nonprofit entity without direct ownership interest Consumption Income = Income spent on consumer goods and services</p> Signup and view all the answers

    What is 'economic dilution'?

    <p>A decrease in an enterprise’s share or asset values</p> Signup and view all the answers

    Which of the following best describes the common good?

    <p>The total of social conditions allowing individual fulfillment</p> Signup and view all the answers

    What is the definition of an 'appropriation'?

    <p>Funds that must be approved each time they are allocated</p> Signup and view all the answers

    Collective ownership allows individuals to acquire personal ownership stakes.

    <p>False</p> Signup and view all the answers

    Aggregate demand is the sum of all demand in an economy.

    <p>True</p> Signup and view all the answers

    __________ refers to the ability of a capital project to generate future savings to repay a loan.

    <p>Feasibility</p> Signup and view all the answers

    What causes deflation in an economy?

    <p>An increase in the value of money or a decrease in the amount of money available.</p> Signup and view all the answers

    Define social charity in one sentence.

    <p>Social charity is a virtue guiding behavior toward institutions, aiming for their improvement and transformation.</p> Signup and view all the answers

    Collateral is defined as existing wealth __________ as security for a loan.

    <p>pledged</p> Signup and view all the answers

    The process by which a central bank purchases qualified loans is called __________.

    <p>discounting</p> Signup and view all the answers

    Match the following concepts with their definitions:

    <p>Corporation = A legal entity limiting personal liability Collective = An abstraction of group activities Consumption Income = Income spent on consumer purchases Social Justice = The quest for fairness in society</p> Signup and view all the answers

    Which of the following would be considered a good use of credit under Capital Homesteading?

    <p>Funding private sector production</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Demand = The desire to possess a good or service Deflation = A contraction in the volume of available money or credit Discount Rate = The percentage reduction for loans by the central bank Economic Dilution = A decrease in share value due to new shares being issued</p> Signup and view all the answers

    What type of organization is a Community Investment Corporation (CIC)?

    <p>For-profit entity for community investment</p> Signup and view all the answers

    Maimonides believed that charity should enable the poor to help others.

    <p>True</p> Signup and view all the answers

    What does consumption income refer to?

    <p>Income expended on consumer goods and services.</p> Signup and view all the answers

    The community-focused organization that was previously known as __________ was rebranded to Citizens Land Bank.

    <p>Community Investment Corporation</p> Signup and view all the answers

    Match the following terms with their connections:

    <p>Citizens Land Development Cooperative = An ownership mechanism for land development Chicago Plan = Proposal to stabilize the banking system Collectivism = Ownership by the group Common Good = Framework for social justice</p> Signup and view all the answers

    Which characteristic distinguishes a corporation from other business types?

    <p>Limited liability for its owners</p> Signup and view all the answers

    What principle is central to the ‘Just Third Way’?

    <p>Justice</p> Signup and view all the answers

    Greed is considered a virtue in the ‘Just Third Way’.

    <p>False</p> Signup and view all the answers

    Define commutative justice.

    <p>Commutative justice refers to exchanges of equal or equivalent value between individuals or groups.</p> Signup and view all the answers

    The concept of justice rests on the dignity of each __________.

    <p>human person</p> Signup and view all the answers

    Match the types of justice with their definitions:

    <p>Participative Justice = Right to participate fully in institutions of the common good Distributive Justice = Proportional distribution of resources based on contribution Commutative Justice = Exchanges of equal value between parties Social Justice = Correcting barriers to participative and distributive justice</p> Signup and view all the answers

    Which of the following is NOT a cardinal virtue in classical moral philosophy?

    <p>Honesty</p> Signup and view all the answers

    Distributive justice operates on the principle of strict equality of results.

    <p>False</p> Signup and view all the answers

    What is the ultimate purpose of economic justice?

    <p>To enable individuals to develop to their full potential and engage in meaningful work.</p> Signup and view all the answers

    The ‘Just Third Way’ views __________ as a vice.

    <p>envy</p> Signup and view all the answers

    Match the terms with their definitions:

    <p>Participative Justice = Input principle Distributive Justice = Out-take principle Social Justice = Feedback and corrective principle Economic Justice = Guides economic institutions</p> Signup and view all the answers

    What does the principle of economic justice primarily aim to prevent?

    <p>Monopoly</p> Signup and view all the answers

    Charity is based on the idea ‘to each according to his contribution’.

    <p>False</p> Signup and view all the answers

    What is the role of social justice in economic systems?

    <p>To hold individuals accountable to correct barriers to justice within economic institutions.</p> Signup and view all the answers

    Justice reflects the qualities of balance and __________.

    <p>equivalence</p> Signup and view all the answers

    What is the aim of the Global Justice Movement?

    <p>Restructuring global money and marketplace for economic justice</p> Signup and view all the answers

    Inflation has only one principal type.

    <p>False</p> Signup and view all the answers

    What does ISOP stand for?

    <p>Individual Stock Ownership Plan</p> Signup and view all the answers

    The rental value of a home treated as income is known as __________ Rent.

    <p>Imputed</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Fractional Reserve Policy = A system where banks only hold a fraction of deposits as reserves Primary Security = Newly issued equity or bonds from the issuer Secondary Security = Resale of existing equity or bonds Insurance, Capital Credit = Protection for lenders against borrower defaults</p> Signup and view all the answers

    Which of the following is a characteristic of Cost/Push inflation?

    <p>It results from increased production costs</p> Signup and view all the answers

    Interest is accurately described as the rent of money.

    <p>False</p> Signup and view all the answers

    What economic policy was developed by Louis Kelso and David Lawrence in 1964?

    <p>Industrial Homestead Act</p> Signup and view all the answers

    Demand/Pull inflation results from more units of currency __________ the same goods and services.

    <p>chasing</p> Signup and view all the answers

    What is the main difference between primary and secondary securities?

    <p>Primary securities are newly issued, while secondary are existing securities.</p> Signup and view all the answers

    Just Third Way advocates for a concentration of economic power.

    <p>False</p> Signup and view all the answers

    What type of inflation can be controlled through fiscal and monetary policy?

    <p>Demand/Pull inflation</p> Signup and view all the answers

    Capital credit insurance serves as a substitute for __________.

    <p>collateral</p> Signup and view all the answers

    Match the terms with the correct definitions:

    <p>Interest-Free Credit = Financing that does not charge interest Pure Credit = Money created without existing savings Forced Savings = Mandatory savings from income Inflation = General rise in price levels</p> Signup and view all the answers

    What is a primary focus of participative justice?

    <p>Ensuring access to means of acquiring economic value</p> Signup and view all the answers

    Social justice is primarily concerned with the individual good of members in society.

    <p>False</p> Signup and view all the answers

    What does the formula V=Q/P represent in Justice-Based Management?

    <p>Value equals Quality divided by Price.</p> Signup and view all the answers

    Justice-Based Leadership incorporates concepts such as servant leadership, transformational leadership, and __________ leadership.

    <p>principle-centered</p> Signup and view all the answers

    Match the following principles to their corresponding definitions:

    <p>Participative Justice = Access to the means of acquiring economic value Social Justice = Common good of society Justice-Based Leadership = Aligning individual values with principles of justice Justice-Based Management = Framework for sustainable ownership cultures</p> Signup and view all the answers

    Which statement about participative justice is true?

    <p>It demands the elimination of barriers to capital ownership.</p> Signup and view all the answers

    Social justice only applies to large societal groups and not individual organizations.

    <p>False</p> Signup and view all the answers

    What concept in Justice-Based Leadership emphasizes the empowerment of others?

    <p>Servant leadership.</p> Signup and view all the answers

    In binary economics, __________ refers to all forms of work contributed to the economic process.

    <p>labor</p> Signup and view all the answers

    Match the components of transformational leadership:

    <p>Charisma = Leader as role model Inspirational Motivation = Encouraging enthusiasm among followers Intellectual Stimulation = Encouraging innovative thinking Individual Consideration = Personal attention to followers' needs</p> Signup and view all the answers

    The goal of Justice-Based Leadership is to:

    <p>Center life on correct principles</p> Signup and view all the answers

    Justice-Based Management emphasizes delivering maximum value to workers over customers.

    <p>False</p> Signup and view all the answers

    What is one of the four components of transformational leadership in JBL?

    <p>Charisma, Inspirational Motivation, Intellectual Stimulation, or Individual Consideration.</p> Signup and view all the answers

    Social justice imposes on each member of society a personal responsibility to work towards __________.

    <p>improving institutions</p> Signup and view all the answers

    Match the following terms to their definitions:

    <p>Economic Justice = Distribution follows participation Social Goods = Tools for equal participation Participative Justice = Access to capital ownership Justice-Based Management = Framework for sustainable enterprise</p> Signup and view all the answers

    What does M1 in the U.S. economy consist of?

    <p>Currency, travelers checks, demand deposits, and other checkable deposits</p> Signup and view all the answers

    The principle of limitation is significant in an economy where everyone owns only their labor.

    <p>False</p> Signup and view all the answers

    What economic concept did Kelso and Adler later rename the principle of limitation to?

    <p>the principle of harmony or social justice</p> Signup and view all the answers

    Monetary aggregate M3 includes balances in __________ money market mutual funds.

    <p>institutional</p> Signup and view all the answers

    Match the following monetary aggregates with their definitions:

    <p>M1 = Currency, travelers checks, demand deposits, and other checkable deposits M2 = M1 plus savings deposits and small-denomination time deposits M3 = M2 plus large-denomination time deposits and institutional money market funds M3 discontinued = Measurement stopped by the Federal Reserve as of March 2006</p> Signup and view all the answers

    In which economic system does the principle of limitation hold no meaning?

    <p>A labor-only ownership economy</p> Signup and view all the answers

    Mercantilism promotes free market competition for all citizens.

    <p>False</p> Signup and view all the answers

    What was the primary goal of national economies under mercantilism?

    <p>Accumulation of specie (gold and silver)</p> Signup and view all the answers

    A market glut refers to production that cannot be cleared at __________ prices.

    <p>market</p> Signup and view all the answers

    Match Maslow's hierarchy levels with their focus:

    <p>Survival needs = Most urgent needs for living Social needs = Recognition by others Self-esteem = Importance of self-worth Self-actualization = Reaching fullest human potential</p> Signup and view all the answers

    What is a significant outcome of mercantilist policies?

    <p>Widening gap between wealthy and poor</p> Signup and view all the answers

    Seasonally adjusted M2 includes large-denomination time deposits.

    <p>False</p> Signup and view all the answers

    What is the primary function of the secondary market?

    <p>To purchase financial instruments from other than the original issuers</p> Signup and view all the answers

    The concept of __________ was historically used to describe the concentration of economic power by monopolies.

    <p>mercantilism</p> Signup and view all the answers

    What does Louis Kelso contribute to the concept of economics?

    <p>A framework for overcoming artificial constraints to shared abundance</p> Signup and view all the answers

    Economic sovereignty refers to the right to a living wage.

    <p>False</p> Signup and view all the answers

    What was the term originally used by binary economists that later changed to Justice-Based Management?

    <p>Value-Based Management</p> Signup and view all the answers

    Voting passthrough in an ESOP allows participants to vote on all shareholder issues.

    <p>False</p> Signup and view all the answers

    What principle states that responsibilities should be handled by the lowest competent authority?

    <p>Subsidiarity</p> Signup and view all the answers

    What does the wage system primarily emphasize regarding income generation?

    <p>Compensation through wages</p> Signup and view all the answers

    A tax __________ allocates funds by allowing tax payers to retain part of their taxes for approved activities.

    <p>credit</p> Signup and view all the answers

    Match the following terms with their descriptions:

    <p>Sovereignty = Possession of inalienable rights Socialism = State control of means of production Synergy = Cooperating units producing greater effects Subsistence = Barely meeting survival needs</p> Signup and view all the answers

    The concept of __________ work includes unpaid human activity that provides personal or social value.

    <p>leisure</p> Signup and view all the answers

    What is the primary focus of binary economics?

    <p>Enhancing personal wealth through shared capital</p> Signup and view all the answers

    Match the following terms with their descriptions:

    <p>Zero-Sum = One person's gain is another's loss Wage System = Income generation through compensation for labor Leisure Work = Unpaid activity contributing to personal or social development Justice-Based Management = A management philosophy integrating moral values and market concepts</p> Signup and view all the answers

    In binary economics, scarcity is viewed as a permanent condition.

    <p>False</p> Signup and view all the answers

    Which term is described as an economic arrangement where wealth is concentrated among a small percentage of people?

    <p>Wage System</p> Signup and view all the answers

    In a zero-sum game, both parties can benefit from the outcome.

    <p>False</p> Signup and view all the answers

    What is defined as the total value of goods and services produced in a country, minus exports?

    <p>Aggregate supply</p> Signup and view all the answers

    The right to own property is often considered the moral foundation of __________ sovereignty.

    <p>economic</p> Signup and view all the answers

    According to Aristotle, leisure work is considered the work of __________.

    <p>civilization</p> Signup and view all the answers

    What is the term for the financial gain resulting from the use of capital in a transaction after all expenses are paid?

    <p>Profits</p> Signup and view all the answers

    The marginal propensity to consume of a rich person is higher than that of a poor person.

    <p>False</p> Signup and view all the answers

    Economic plutocracy results from the concentration of power and wealth among a __________ percentage of people.

    <p>tiny</p> Signup and view all the answers

    Match the following economic terms with their general implications:

    <p>Credit = Borrowing power Tax Credit = Subsidy to retain tax funds Subsistence = Economic underdevelopment Social Justice = Fair distribution of resources</p> Signup and view all the answers

    What type of law requires passing through votes on major issues within an ESOP?

    <p>Current ESOP Law</p> Signup and view all the answers

    Which of the following best describes 'value' in economic terms?

    <p>The worth determined by market forces</p> Signup and view all the answers

    What does the Quantity Theory of Money formula express mathematically?

    <p>M x V = P x Q or M x V = P x T</p> Signup and view all the answers

    The principle of subsidiarity promotes higher organizations taking over functions of lower organizations.

    <p>False</p> Signup and view all the answers

    The __________ is the proportion of disposable income that the average individual or family unit spends on goods and services.

    <p>Average Propensity to Consume</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Profits = Financial gain after expenses are paid Marginal Propensity to Consume = Change in consumption due to change in disposable income Property = Rights associated with ownership Quantity Theory of Money = Relationship between money supply and price level</p> Signup and view all the answers

    What is the economic concept that applies when collective ownership or control is instituted?

    <p>Socialism</p> Signup and view all the answers

    Which of the following factors is NOT considered in the measure of productivity?

    <p>Technology</p> Signup and view all the answers

    The rights of property include the right to destroy or injure if the owner desires.

    <p>True</p> Signup and view all the answers

    What does 'rediscounting' allow in the context of a central bank?

    <p>It allows the central bank to discount financial paper that commercial banks have discounted for their borrowers.</p> Signup and view all the answers

    What does Personalism primarily reject in comparison to Collectivism?

    <p>The idea that human rights are inherent within each person.</p> Signup and view all the answers

    Under Capital Homesteading, new money creation is linked to the ability to satisfy the region's needs for capital __________.

    <p>credit</p> Signup and view all the answers

    Economic Personalism aims to concentrate economic power among a select few.

    <p>False</p> Signup and view all the answers

    Match the following economic principles with their components:

    <p>Currency Principle = Price level and money supply proportional change Banking Principle = Money supply not determined by price level Velocity of Money = Rate of currency use per year Reserve Policy, 100% = Dollar of assets per dollar created for lending</p> Signup and view all the answers

    In binary economics, how is property primarily defined?

    <p>As rights recognized by law</p> Signup and view all the answers

    What are the two categories of inputs that each person can contribute to the production of goods and services in Economic Personalism?

    <p>labor and capital</p> Signup and view all the answers

    Personalism seeks the empowerment and full development of every person, including working for the __________ Good.

    <p>Common</p> Signup and view all the answers

    The velocity of money refers to the total stock of money in circulation.

    <p>False</p> Signup and view all the answers

    What type of reserve policy requires banks to maintain a one-to-one ratio between new money created and assets held?

    <p>100% reserve policy</p> Signup and view all the answers

    Match the following concepts related to power with their definitions:

    <p>Power = Ability to effect change or direct actions Legal Power = Ability to produce change in legal relations Economic Power = Ability to influence resources toward production Privilege = Legal freedom to act against another person's rights</p> Signup and view all the answers

    Which principle does Economic Personalism propose for just wage determination?

    <p>Distributive justice</p> Signup and view all the answers

    Power can be completely eliminated from human society.

    <p>False</p> Signup and view all the answers

    What do just prices reflect in a market economy?

    <p>Transaction value reached voluntarily by an informed buyer and seller.</p> Signup and view all the answers

    A just __________ system helps remove barriers to equal opportunity in capital ownership.

    <p>monetary</p> Signup and view all the answers

    Match the following economic systems with their characteristics:

    <p>Monopolistic Capitalism = Concentration of economic power Collectivist Socialism = State or collective ownership Economic Personalism = Democratized access to capital ownership Free Market = Guided by principles of justice</p> Signup and view all the answers

    What is the primary role of money in commerce?

    <p>A measurement of value</p> Signup and view all the answers

    The economic principle that recognizes the link between property and power is rooted in which political philosophy?

    <p>Personalism</p> Signup and view all the answers

    Price in a centrally planned economy is determined by supply and demand.

    <p>False</p> Signup and view all the answers

    Old money refers to newly created money independent of past accumulations.

    <p>False</p> Signup and view all the answers

    What is meant by 'Post Scarcity' in an economic context?

    <p>A condition where resources are abundant enough to meet needs without competition.</p> Signup and view all the answers

    Who primarily carries out the monetization process?

    <p>Commercial banks and central banks.</p> Signup and view all the answers

    Economic Personalism aims to ensure equality of access to the means of acquiring future __________ ownership.

    <p>capital</p> Signup and view all the answers

    The proposal for subsidizing basic subsistence incomes through the tax system is known as __________.

    <p>Negative Income Tax</p> Signup and view all the answers

    Match the following types of money with their descriptions:

    <p>Money, Old = Past accumulations available for new capital formation Money, New = Newly created money independent of past accumulations Paper, Agricultural = Financial instruments secured by agricultural assets Paper, Commercial = Unsecured financial instruments usually issued by firms</p> Signup and view all the answers

    Which of the following is NOT a principle advocated by Economic Personalism?

    <p>Regulated monopolies</p> Signup and view all the answers

    What does the term 'Reserve Policy, Fractional' refer to?

    <p>The percentage of deposits required to be kept as reserves.</p> Signup and view all the answers

    What does non-recourse credit refer to?

    <p>Credit without a claim on the borrower’s other assets</p> Signup and view all the answers

    Under Capital Homesteading, a risk premium is not typically added by a lender.

    <p>False</p> Signup and view all the answers

    Under the Capital Homesteading approach, new money is financed with interest-free pure credit.

    <p>True</p> Signup and view all the answers

    What is meant by 'personalism' in the context of rights?

    <p>An intellectual movement promoting the unique dignity and fundamental human rights of each person.</p> Signup and view all the answers

    What is the legal significance of a right?

    <p>A legally enforceable claim against another party.</p> Signup and view all the answers

    According to binary economics, money is a system of __________.

    <p>symbols</p> Signup and view all the answers

    According to Say’s Law of Markets, production and __________ should be kept in balance.

    <p>consumption</p> Signup and view all the answers

    Match the following types of scarcity with their definitions:

    <p>Effective Scarcity = Condition of insufficiency Economic Scarcity = Resource cannot be used for more than one purpose at a time Post Scarcity = Transformation that overcomes effective scarcity Scarcity = Choice on resource utilization</p> Signup and view all the answers

    Match the following monetary concepts with their definitions:

    <p>Medium of exchange = A tool used to settle transactions Store of value = Retains value over time Standard of value = Measurement of value between goods Common measure of value = Uniform way of assessing worth</p> Signup and view all the answers

    Which of the following best describes the Open Market Committee?

    <p>It determines the money supply by buying and selling Treasury securities.</p> Signup and view all the answers

    What is the purpose of binary economics according to its principles?

    <p>To restore market equilibrium through equitable capital ownership.</p> Signup and view all the answers

    Scarcity in economic terms refers strictly to the quantity of a resource available.

    <p>False</p> Signup and view all the answers

    A 'person' can legally include corporations as artificial persons.

    <p>True</p> Signup and view all the answers

    What is the basic premise of the Capital Homestead Act?

    <p>To enable individuals to accumulate capital assets without tax implications.</p> Signup and view all the answers

    What is the term for existing pools of savings in binary economics?

    <p>Past Savings</p> Signup and view all the answers

    Money serves as a __________ for measuring economic input and output.

    <p>yardstick</p> Signup and view all the answers

    A capital credit insurer pools risk premiums to provide a substitute for __________.

    <p>collateral</p> Signup and view all the answers

    Match the following economic principles with their definitions:

    <p>Scarcity, Economic = The quality of a resource that restricts its use to one purpose at a time Scarcity, Effective = Unyielding constraint on growth and development Scarcity, Post = Cooperative economic arrangements to address insufficiency</p> Signup and view all the answers

    What is implied by the term 'ephemeralization' in binary economics?

    <p>Enhancing technology to achieve more with fewer resources.</p> Signup and view all the answers

    Binary economics believes that effective scarcity is an inevitable condition.

    <p>False</p> Signup and view all the answers

    Define risk premium in the context of loans.

    <p>An amount added by lenders to protect against loan repayment risks.</p> Signup and view all the answers

    A bank's reserves can include cash or cash equivalents, primarily in the form of __________.

    <p>government bonds</p> Signup and view all the answers

    Study Notes

    Appropriation

    • Funds allocated by legislators annually for government programs through the appropriations process.
    • Differentiates from entitlements, which provide automatic funding without repeated approval.
    • Use of tax credits and breaks can obscure true government spending, reducing accountability.

    Banks and Financial Institutions

    • Commercial Banks: Take deposits, make loans, and facilitate economic transactions; may create money.
    • Central Banks: Serve as "banks for banks," providing currency and regulating money creation, typically not available for personal loans.
    • Investment Banks: Buy/sell securities, acting as intermediaries between original issuers and buyers.

    Binary Economics

    • Developed by Louis O. Kelso, divides production factors into human (labor) and non-human (capital).
    • Promotes sustainable economic growth through property ownership and equitable wealth distribution.
    • Key concepts:
      • Binary Productiveness: Capital assets contribute increasingly to output.
      • Binary Property Right: Right to acquire wealth-generating capital.
      • Binary Growth: Broad capital ownership leads to economic expansion.

    Capital Ownership Models

    • Capital Homesteading: Concept enabling widespread capital ownership, extending beyond land to advanced technologies.
    • Capital Homestead Act: Aims to eliminate barriers to acquiring capital assets, promoting economic security for all citizens.
    • Capital Credit Institutions: Facilitate capital ownership through loan aggregation and insurance mechanisms against defaults.

    Charity and Social Justice

    • Charity: Focused on aiding individuals based on need; distinct from justice, which relates to contribution.
    • Social Charity: Aims to improve institutions and systems rather than just individuals, essential for social justice.

    Historical Proposals

    • Chicago Plan: Proposed full reserve requirement for banks to ensure stability against speculative loans.
    • Citizens Land Bank: Structure allowing citizens to directly invest and manage local real estate, enhancing community ownership and investment.

    Concepts of Collectivism and Common Good

    • Collectivism: Denies individual ownership, recognizing only group ownership, contrasting with joint ownership.
    • Common Good: Framework within which social institutions ensure justice, allowing for individual rights and societal conditions necessary for personal and collective fulfillment.

    Corporate Structure

    • Corporation: A legal entity limiting liability for shareholders while facilitating collective asset management and operational risks.### Corporate Accountability and Economic Concepts
    • Corporations have increasingly failed to balance productive growth with adequate purchasing power, leading to managerial abuses.
    • Enhancing corporate accountability, transparency, and dividend distributions to employees and a wider shareholder base can mitigate corporate shortcomings.

    Cost and Credit Types

    • Cost: The total of all direct and indirect expenses associated with producing goods and services.
    • Capital Credit: Loans for self-liquidating projects expected to generate income, designed to help individuals become capital owners without prior savings.
    • Consumer Credit: Borrowed funds spent on consumer goods, which do not generate income.
    • Interest-Free Credit: Loans aimed at productive purposes without interest, focusing on preventing usury as defined in some religious traditions.
    • Non-Recourse Credit: Loans where the borrower's personal assets are protected from seizure upon default, secured by project assets.
    • Pure Credit: Interest-free loans tied to future productivity, involving enforceable promises and asset-backed financing without relying on existing savings.

    Economic and Financial Mechanisms

    • Self-Liquidating Credit: Loans anticipated to be repaid by profits generated from the financed capital assets.
    • Two-Tiered Credit System: A monetary reform distinguishing between beneficial uses of credit (e.g., for broad ownership) and detrimental uses (e.g., nonproductive speculations).
    • Demand: The desire for goods/services linked to the ability to make legal transactions.
    • Aggregate Demand: Total demand in the economy calculated by consumer and investment expenditures plus net exports.
    • Demand Deposits: Bank funds available for immediate withdrawal, such as checking accounts.

    Ownership and Dividend Structures

    • Customer Stock Ownership Plan (CSOP): Program enabling customers of utilities and cooperatives to accumulate shares and benefit from future profits while offsetting bills with dividends.
    • Dividend: Profits distributed to shareholders, currently subject to board approval, potentially limiting owners' property rights.
    • Employee Stock Ownership Plan (ESOP): Mechanism allowing employees to acquire shares in their company using pre-tax profits without personal financial risk.

    Economic Justice and Capital Ownership

    • Distributism: Economic model advocating for widely held ownership of productive assets to protect individual rights and break wealth concentration.
    • Economic Justice: Emphasizes fairness in the distribution of wealth and opportunities.
    • Capital Homesteading: Concept aimed at facilitating capital ownership through accessible credit channels, encouraging broad distribution of wealth in society.

    Inflation and Economic Dynamics

    • Inflation: A general increase in price levels, with "Demand/Pull" inflation caused by excess money chasing limited goods, and "Cost/Push" inflation driven by rising production costs.
    • Deflation: A reduction in the amount of money or credit, leading to a decrease in prices, generally caused by currency constraints or economic slowdowns.
    • Discount Rate: The rate at which central banks lend money to commercial banks, influencing overall interest rates in the economy.

    Currency and Insurance in Economics

    • Currency: Standardized tokens of value serving as money within an economy.
    • Insurance, Capital Credit: Protection for lenders against borrower defaults, ensuring a safety net in financing arrangements.

    Additional Concepts

    • Ephemeralization: Process of doing more with less through technological improvement and resource efficiency.
    • Forced Savings: Economically induced savings through governmental measures, designed to enhance capital accumulation.
    • Imputed Rent: The estimated rental value of a homeowner's property treated as potential income.

    These notes capture key concepts and terms related to corporate governance, economic principles, credit types, and ownership structures, facilitating better understanding and revision of the material.### Capital Credit Insurance and Borrowers

    • Capital credit insurance substitutes for collateral, aiding borrowers without savings or income.
    • Under the Capital Homesteading proposal, this insurance protects lenders against debt servicing risks tied to new corporate growth shares.

    Understanding Interest

    • Interest, or “ownership interest,” is derived from profits of a financed project.
    • Commonly viewed as a charge for money use, technically, it should be considered a "service charge" when using "pure credit" rather than savings.

    Types of Issuance: Primary and Secondary Securities

    • Primary Issuance: Newly issued equity shares or bonds sold directly by private companies or governments as "primary government securities."
    • Secondary Issuance: Existing shares or bonds resold from one party to another, often traded on stock exchanges, with values determined by market speculation.

    Just Third Way Economic Paradigm

    • A socio-economic alternative empowering individuals through democratized money and credit access to capital ownership.
    • Contrasts capitalism, where capital ownership is concentrated, and socialism/communism, where the state controls production.

    Principles of Justice

    • Justice is a universal moral framework guiding right and wrong across cultures.
    • Central tenet: "suum cuique," meaning "to each his due," reflecting the dignity of each person.

    Types of Justice

    • Commutative Justice: Focuses on equivalent value exchanges in transactions; exact debts must be repaid.
    • Distributive Justice: Concerned with the fair distribution based on relative contributions, linking income to productive efforts.
    • Economic Justice: Aims to empower individuals economically, providing a foundation for personal potential.

    Economic Justice Triad

    • Participative Justice: Guarantees everyone access to contribute economic value through labor and capital.
    • Distributive Justice: Ensures fair distribution of income based on participation.
    • Social Justice: Motivates individuals to correct economic inequalities and uphold participative and distributive justice.

    Leadership and Management Philosophies

    • Justice-Based Leadership (JBL): Aligns personal and organizational values with principles of justice, emphasizing trust and empowerment.
    • Justice-Based Management (JBM): Implements JBL in organizations, prioritizing sustainable ownership cultures and maximizing customer value.

    Definitions of Money Supply (M1, M2, M3)

    • M1: Currency in circulation, traveler’s checks, and demand deposits at banks.
    • M2: M1 plus savings deposits, small time deposits, and retail money market fund balances.
    • M3: M2 plus institutional money market funds, large time deposits, and repurchase agreements (discontinued in 2006).

    Additional Economic Concepts

    • Market Glut: Situations where production exceeds demand, resulting in unsold goods.
    • Primary Market: Direct purchasing from original issuers, while the Secondary Market involves buying from resellers.

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    Test your understanding of the legislative process, especially focusing on appropriations and how they differ from entitlement programs. This quiz covers key concepts related to government funding allocations and their implications. Explore how legislators manage spending through different mechanisms.

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