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22 Cards in this Set

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