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22 Cards in this Set
- Front
- Back
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benefits-received principle
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A system of taxation in which those who use a particular government service support it with taxes in proportion to the benefits they receive from it.
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ability-to-pay principle
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A taxation principle under which those with higher incomes pay more in taxes than those of lower incomes, regardless of the number of government services they use.
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sacrifice principle
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A principle of taxation that holds that the sacrifices people make to pay their taxes should be fair
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proportional taxation
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A system of taxation in which the tax rate remains constant regardless of a person's income.
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progressive taxation
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a system of taxation in which individuals pay a higher percentage of additional tax dollars as income rises. In this way, the marginal tax rate exceeds the average tax rate.
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marginal tax rate
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The percent of additional dollars that must be paid in icome taxes. The marginal tax rate is applied to the highest tax bracket only.
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regressive taxation
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A system of taxation in which individuals pay a lower percent of tax dollars as income rises. In this way, the marginal tax rate is less than the average tax rate.
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monetary policy
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Changes in the rate of growth of the money supply and in the availability of credit.
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Federal Reserve System
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The central bank of the United States. "The Fed" was established in 1913 and is lead by a board of governors.
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fiscal policy
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The discretionary adjustments of government expenditures and/or taxes in order to achieve national economic goals, such as high employment and price stability.
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loose monetary policy
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A policy designed to stimulate the economy by making credit inexpensive and widely available.
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tight monetary policy
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A policy designed to slow the economy by making credit expensive and in short supply.
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inflation
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A general increase in prices.
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business cycles
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Cycles of economic activity consisting of recession, recovery, growth and decline.
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recession
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A period of time in which the rate of economic growth is consistantly lower than usual.
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depression
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A major slow down of economic activity characterized by high unemployment and business downturns and failures.
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budget deficit
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The shortage of funds caused by spending more than is allotted for expenses or thanis collected in revenues.
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U.S. Treasury bonds
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certificates bought by individuals and businesses as a means of loaning money to the government.
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public debt
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The total amount the government owes as a result of borrowing and interest on borrowed money.
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national debt
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The total amount the government owes as a result of borrowing and interest on borrowed money.
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flat tax
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A single tax rate with no permitted deductions, used for everyone after a certain amount of initial yearly income has been earned.
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off-budget items
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a category outside an official budget.
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