3E Economics par. 9.2, 9.3, 9.4 and 9.5

• Economie
• Middelbare school
• vwo
• Leerjaar 3

Par. 9.1 assignment 9a

1. smaller, 20 / 2
2. larger, 20 / 2
3. smaller, 1.750 / 500
4. larger, 1.750 / 500

Par. 9.1 assignment 11d

1. 170
2. 170 - 20
3. 170 - 100
4. 170 - 120

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How many percent of the total income the poorest 80% of Brazil earn ( f.e. lay out answer 10,0% )

The income distibution in The Netherlands is ... than in Brazil

1. less fair
2. fairer
3. less equal
4. more equal

Primary income: rewards for the production factors

( wages, rent, lease, interest, profit )

The distribution of primary incomes in a country can be skewed

( f.e. difference in education, difference in assets )

Secondary income =

Primary income - Taxes + Benefits

Distribution of secondary income is less skewed than that of primary income

Progressive taxation system

1. higher incomes pay lower taxes than lower incomes
2. higher incomes pay higher taxes than lower incomes
3. higher incomes pay lower tax % than lower incomes
4. higher incomes pay higher tax % than lower incomes

Distribution of secondary income is less skewed than that of primary income:

- progressive taxation system

- People with lower incomes receive benefits

( f.e. unemployed / disabled )

slump, recession, depression

Unemployment

/                                \

Less demand for labour                        Less income

     \                                          /

Lower production         _          Less expenditures

Disadvantages unemployment:

- personal and social unrest

- financial deficit government

- lower wages

- unemployment leads to more unemployment

Anti Cyclical government policy during a slump:

- decrease taxes

( higher net income )

- increase government spending

( snowball effect )

When the interest rate is high, people are ...(1) willing to save. This means they will spend ...(2)

1. 1 less 2 less
2. 1 less 2 more
3. 1 more 2 less
4. 1 more 2 more

Role ECB

During an economic slump the ECB will lower interest rates:

- people will save less and spend more

- people will borrow more and spend more

During an economic boom the demand for goods ....(1) the supply of goods.
This means prices will ...(2)

1. 1 < 2 decrease
2. 1 < 2 increase
3. 1 > 2 decrease
4. 1 > 2 increase

A negative effect of an economic boom is inflation.

This leads to:

- decrease in purchasing power

- decrease in international competitiveness

During an economic boom the government should ...(1) taxes and ...(2) government spending

1. 1 decrease 2 decrease
2. 1 decrease 2 increase
3. 1 increase 2 decrease
4. 1 increase 2 increase

During an economic boom the ECB will ...(1) interest rates, so people will spend ...(2)

1. 1 lower 2 less
2. 1 lower 2 more
3. 1 increase 2 less
4. 1 increase 2 more

Hw.

Par. 9.2 assignment 1

Par. 9.3 assignment 3

Par. 9.4 assignment 6

Par. 9.5 assignment 4