Short questions (Bổ sung)

1. American government’s revenue from taxation can be divided into 2

types. What are they?
They are trust fund and federal fund.
2. What factors cause the whole demand curve shift to the left or to the
right?
Shift factors cause the whole demand curve…..
3. What is a market economy?
It is an economic system in which the market is supposed to be regulated
by the law of supply and demand.
4. How does the government influence the economy in the market
economy?
The government influences the economy through its macroeconomic
polocies.
5. How do companies compete in the market economy?
They are supposed to compete freely in the market economy.
6. How do commercial banks make profits?
They make profits from the difference between selling rates and buying
rates.
7. What is progressive tax?
Progressive tax is a tax levied at a higher rate on higher income.
8. What are tax deductibles?
Tax deductibles are the amounts that can be subtracted from the income
on which tax is calculated.
9. What is VAT?
VAT is a tax collected at each stage of production, excluding the already-
taxed costs from previous stages.
10.What is a planned economy?
It is a system whereby the structure of the market is planned by the stae.
11. What is a mixed economy?
It is an economic system in which some goods and services are produced
by the government and some by private enterprises.
12.What is GDP?
GDP is the total value of all goods and services produced by a country in
a year.
13.What is capital transfer tax?
It is the tax imposed on gifts or inhertances over a certain value.
14. What can the insured get in case of a loss?

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 The insured can get a promise from the insurance system to be
compensated when a loss occurs.
15.How can a company’s employees with high salaries avoid paying taxes?
They receive perks such as company’s cars, free health insurance… They
invest a part of their incomes in pension funds, life insurance policies…
16. What can the Government do if it wants to run an expansionary fiscal
policy?
The Government can increase government spending or reduce tax rates or
combine both.
17. What can the Government do if it wants to run a contractionary fiscal
policy?
The Government can reduce government spending or increase tax rates or
combine both.
18. What can the Central bank do if it wants to run a restrictive monetary
policy?
The Central bank can increase reserve requirement, increase discount rate
or sell government securities.
19. What can the Central bank do if it wants to run an expansionary
monetary policy?
The Central bank can reduce reserve requirement, reduce discount rate or
buy government securities.
20. What is wealth tax?
It is the annual tax imposed on people’s fortunes.
21. What are economic relations? They are the relation between producers
and consumers, buyers and sellers, management and labor.
22. What is the unit of account/ measure of value? It is the unit which prices
are quoted and accounts are kept.
23. What is a primary market? A primary market is a financial market in
which fresh securities are issued.
24. What is long-term debt instrument? Long-term debt instrument is the
debt instrument when its maturity is 10 years or longer.
25. What is money market? Money market is a financial market in which
only short-term debt instruments are traded.
26. What is capital market? Capital market is the market in which long-term
debt and equity instruments are traded.
27. What is a securities market? A securities market is the market in which
securities are exchanged.
28. What are 2 types of funds from taxation in American? They are trust
funds and federal funds.

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29. What are 2 kinds of debts? They are debt held by the public and debt
held by federal accounts.
30. What do resources include? Resources include the time and talent people
have available, the land, buildings, equipment, tools and the knowledge
of how to combine them to create useful products and services.

Free talk. (Bổ sung)

1. What is the difference between the economic theory of Adam Smith
and Marxism theory?
Adam Smith believed that governments shouldn’t restrict or interfere
in market ………maximum efficiency.
Marxism stated that capitalism will fail ……. class conflict.
2. What are differences between microeconomics and macroeconomics?

- Microeconomics is the study of individuals and business decisions while

macroeconomics looks at higher up country and government decisions.

- Some issues in microeconomics are price, demand, supply. Some issues

in macroeconomics are inflation, economic growth, GDP…

- Microeconomics uses bottom-up approach but macroeconomics uses top-

down approach in study.

3. What is the difference between demand and quantity demanded?

- Definition of demand and quantity demanded.

- Demand is illustrated in a graph by the whole demand curve while QD is

illustrated in a graph by a point of demand curve.

4. What is the difference between a change in demand and a change in

quantity demanded (QD)?

- A change in demand is caused by shift factors of demand. A change in

demand caused a shift of the entire demand curve.

- A change in QD is caused by the price of goods or services. A change in

QD causes a movement along the demand curve.

5. By what way does the Treasury raise money?

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 - The Treasury raises money by 2 ways: the first way is collecting
taxes, the 2nd way is borrowing money by issuing bonds or borrowing
from the surplus of trust fund.

6. Under what circumstances can fiscal policy (FP) be expansionary?

A FP is expansionary when government spending is increased or taxation

is reduced.

An expansionary FP should be used when unemployment is high or

economy is slowing down.

- Under what circumstances can fiscal policy (FP) be contractionary?

A FP is contractionary when government spending is reduced or taxation is

increased.

A contractionary FP should be used when inflation is high.

7. What does an insurance policy involve?

- An insurance policy is signed between the insurance company and the

insured.

It involves the information about the responsibilities and benefits for the insured
and the insurance company.

8. What do you think is the most important function of money? Why?

Medium of exchange is the most important function because money as a

medium of exchange has made the trading process much cheaper, more
convenient.

9. What is a restrictive monetary policy? Under what circumstances should

monetary policy be restrictive?
- The monetary policy is restrictive when the money supply is reduced.
- The MP should be restrictive when inflation is high.
- The Central bank runs a restrictive MP by increasing RR, or increasing
DR or selling government securities.
10. Different types of taxes:
- Based on the things imposed taxes:
+ income taxes are the taxes imposed on incomes (personal/individual
income taxes; corporate income taxes)

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 + sales taxes (are the taxes imposed on sales)
+ customs duties (on imports)
+ excise taxes (on special goods/ services)
+ VAT = value added tax is the tax imposed on each stage of production,
excluding the already-taxed costs from previous stages.
…..
Tax evasion means making false declarations to the tax authorities/ tax
offices
Tax avoidance means reducing tax bills to a legal minimum.
 Based on tax rates
+ progressive taxes: (income taxes) are the taxes imposed at a higher
rate on higher incomes.
+ regressive taxes: (VAT, sales tax, …) are the taxes imposed at a
certain tax rate on every value.
• Based on manner of paying taxes:
+ direct taxes (income taxes, wealth tax, …)
Are the taxes in which the tax payer has to contribute tax bills directly to
the tax offices.
+ indirect taxes: are the taxes in which the producers/ providers
contribute the tax bills to the tax offices instead of the tax payer. (the last
consumers have to incur these types of taxes)
11. Taxation has some advantages. For example,
One advantage of income taxes is to redistribute wealth/ so on (functions)
 But there are disadvantages in the tax system. One disadvantage of
income taxes is that business profits are taxed twice, via corporate
income tax on the company’s profits and on dividends via personal
income tax. (It is unfair for the tax payers in the case.)
 Another disadvantage of income taxes is to discourage people to work
harder and invest more, because higher incomes will be liable/ applicable
to higher tax rates. (because income taxes are progressive.)
12. Tax avoidance.
Individuals reduce tax bills (tax payables) to a legal minimum by:
+ receiving perks instead taxable money.
(perks = non-pay benefits such as company’s cars/ free health insurance,
subsidized lunches/ bonuses, other allowances, …) – loopholes in tax
laws.

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 + investing a part of their incomes in life insurance policies, pension
funds, or other investments to delay paying taxes until the future. - tax
shelters.
 Loopholes in tax laws are the legal ways in which individuals/ firms can
avoid paying taxes.
 Tax shelters mean delaying the payment of taxes.
 Tax deductibles refer to the amounts of money subtracted from the
taxable money.
(for example, donations to charities)
13.For what purposes do multinational corporations participate in the Forex?
They participate in the Forex because they demand foreign currencies
for international (cross border) investment business and acquisition of
profits.
For what purposes do import – export companies participate in the
Forex?
They participate in the Forex because they demand foreign currencies
for international (cross border/ foreign) trade.
What do banks as dealers do in the market?
They buy and sell (trade in) foreign currencies.
How do banks as dealers benefit from the participation in the Forex?
They can earn profits on the difference between buying rates (bid rates)
and selling rates (offer rates).
What is an exchange rate?
An exchange rate is the rate in which one currency is exchanged for
another.
Who are market makers? – the central banks
They establish the markets and at any time quote exchange rates based on
the international demand and supply of currencies to supervise the
market’s operations in order to ensure the market’s stability.
(floating rates) –Who are brokers?
What do brokers do in the Forex?
They contact banks throughout the world, so that at any time they could
know the best exchange rates to provide consultancy to their customers
(mostly banks as dealers). They don’t deal on their own account, but they
charge commissions for their services.
Why is Forex ( foreign exchange market) an OTC market?

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 Forex is an OTC market because transactions are made throughout the
day(24 hours a day) via telephone and computer link. It has not fixed
trading hours and physical trading place.
14.The debt market is a financial market in which debt instruments are
traded.
The equity market is a financial market in which equity instruments are
traded.
A primary market is a financial market in which new issues of a security
are sold to initial buyers by the corporation or government agency
borrowing funds.
A secondary market is a financial market in which securities that have
been previously issued (already-issued securities) can be resold.
Exchanges are the securities markets which have a single location to
conduct trades.
OTC markets are markets which have no single location to conduct
trades, but transactions are made via through electronic means of
communication/ via telephone or computer link.
The money market is a financial market in which only short-term debt
instruments are traded.
The capital market is a financial market in which long-term debts and
equity instruments are traded.
15.What are the differences between primary and secondary market?

Primary market Secondary market

- Fresh securities - Outstanding securities are traded.
are issued and - This market is popular to the public.
sold to the initial - Secondary market facilitates the
buyers. selling of securities in the primary
- Information of market.
the market is - Issuers acquire no new capital.
confidential so it
is not popular to
the public.
- It helps issuers
to raise new

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capital.