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23 Cards in this Set
- Front
- Back
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demand in which buyers are completely unresponsive to changes in price
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perfectly inelastic demand
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the differenc between federal gov't spending and federal gov't tax revenue in any one year
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budget deficit
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the difference between federal gov't tax revenue and fedral gov't spending in any one year
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budget surplus
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the total amount of money owed by the federal gov't. it represents the accumulation of all funds borrowed by the federal gov't that have not yet been repaid
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national debt
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a tax applied to the purchase of a specific good or service
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excise tax
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supply in which producers are completely unresponsive to changes in price
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perfectly inelastic supply
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income, earnings, sales, property, or other valued item that has a tax rate applied to it. in the case of the personal income tax, the tax base is incremental income
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tax base
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an amount of money that can be deducted from household income before tax rates are applied
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exemption
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a fixed amount of income that taxpayers can deduct from their taxable income when calculating their personal income taxes, if other deductions are not claimed
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standard deduction
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an amount of money by which the amount of income taxes payable to the gov't can be directly reduced. A person or business must meet certain criteria to be eligible for the credit
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tax credit
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gov't bonds and treasury bills
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gov't securities
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the percentage of the tax base that must be piad to the gov't as tax
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tax rate
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a tax on an imported good
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tariff
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a federal tax credit for eligible low-income working individuals and families
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earned income tax credit (EITC)
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a refund is available even if an income-earner does not pay taxes, as long as he or she files a tax form
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refundable
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taxes based on earnings from work and usually deducted directly from the paycheck
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payroll taxes
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a tax that takes a greater percentage of income from high-income people that from low-income people
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progressive tax
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a tax that takes the same percentage of income from people of all income levels
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proportional tax
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a tax that takes a greater percentage of income from low-income people than from high-income people
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regressive tax
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the impact of the tax that is felt by producers and consumers. consumers bear the burden in the form of higher prices paid for the product; producers bear the burden in the form of lower profits
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burden of the tax
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the percentage of borrowed funds that must be paid to the lender (or investor) for the privilege of using the funds
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interest rate
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money that is borrowed and lent
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loanable funds
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a situation in which gov't spending, financed by borrowing, causes interest rates to rise, which results in less spending by the private economy
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crowding out
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