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16 Cards in this Set

  • Front
  • Back
Capital gains tax
tax taken on a households income, wage, salary...decreases their incentive to save
Individual Retirement Account that has tax advantages because income deposited into these accounts is not taxed until it is withdrawn at retirement and interest earned on the accounts is not taxed
Consumption tax
ONLY goods and services consumed are taxed
Corporate profit tax
tax on a companies profits...a decrease would make companies invest more so they get taxed less from their incomes
investment tax credit
decrease taxes on a company's investments
Governments budget deficit
spending > tax revenues
Gov. gets money by issuing bonds
decreases household saving
Governments budget surplus
tax revenues > spending
gov. pays back bond holders
increases household saving
How the capital gains tax shifts the supply curve
an increase in this tax will shift to the left b/c households want to save less
How IRA requirements shifts the supply curve
lessening the restrictions causes a shift to the right b/c households want to save
how income tax rate shifts the supply curve
decreasing this tax will shift to the right b/c households want to save
the affect on supply curve of switching to only consumption tax
households have more income and only get taxed on what they consume so they want to save more which shifts to the right
How the governments budget surplus affects supply curve
shifts to right b/c households have money paid back to them
how the governments budget deficit affects supply curve
shifts to left b/c households have less money from buying gov. bonds
how the corporate profit tax affects the demand curve
decrease on profit tax shifts demand curve to right b/c firms want to invest (need to borrow)
how the investment tax credit affects the demand curve
decrease on investment tax makes firms need to demand loans...shifts curve to right
"crowding out"
the government's needs to borrow takes away from firm's and household's money to invest