Econ ch 6

  1. Government Purchases of Goods and Services
    Government spending on new goods and services
  2. Public Good
    A good (or service) provided for all of society; no one is excluded from use of a public good
  3. Quasi-Public Good
    A government provided good that could be sold in a private market
  4. Transfer Payments
    Money from the government for which no direct work is required in return.
  5. Social Insurance Program
    Contributions from an individual's wages are made to a fund from which that individual may draw when eligible for benefits.
  6. Progressive Tax
    A tax reflecting a direct relationship between the percentage of income taxed and the size of the income.
  7. Proportional Tax (Flat Tax)
    A tax equal to the same percentage of income regardless of the size of the income.
  8. Regressive Tax
    A tax reflecting an inverse relationship between the percentae of income taxed and the size of the income.
  9. Tax Reform
    Changes in tax policies and structures.
  10. Tax Bracket Indexation
    A policy of adjusting income tax brackets to account for inflation.
  11. Tax Reform Act of 1986
    Major legislation that changed federal income tax exemptions, deductions, brackets and rates.
  12. Tax Base
    The particular thing on which a tax is levied.
  13. Tax Rate
    The amount that is levied on the base.
  14. Tax Abatement
    A policy of reducing or eliminating a tax that would normally be charged.
  15. Fiscal Policy
    Influencing the levels of aggregate output and employment or prices through changes in federal government purchases, transfer payments and or taxes.
  16. Discretionary Fiscal Policy
    Deliberate changes in government expenditures and/or taxes to control unemployment or demand-pull inflation.
  17. Automatic Fiscal Policy (Automatic Stabilization)
    Changes in government expenditures and/or taxes that occur automatically as the level of economic activity changes; helps to control unemployment or demand-pull inflation.
  18. Balanced Budget
    A government's total expenditures equal its total revenues.
  19. Surplus Budget
    A government's revenues are greater than its expenditures.
  20. Deficit Budget
    A government's expenditures are greater than its revenues.
  21. Unified Budget
    A budget that assembles all federal government receipts and outlays, and the resulting overall deficit or surplus, in one report.
  22. Trust Fund
    A restricted fund; payments from this fund are specified as to recipents and/or uses.
  23. Entitlement
    Programs set up by the government to pay benefits to people who meet the eligibility requirements of the programs.
  24. On Budget/Off Budget
    Categories of the unified budget established by Congress; generally refers to programs that have immediately controllable and noncontrollable receipts and expenses, respectively.
  25. Public Choice
    The study of the economic motives and attitudes of voters and public officials and how those motives and attitudes affect government decision making.
  26. National Debt
    The accumulation total debit of the federal government due to deficit spending.
  27. U. S. Treasury Security
    Issued by the federal government in return for funds lent to it.
  28. U. S. Treasury Bill, Note, and Bond
    U. S. Treasury securities that mature, respectively, in one year or less; one to ten years; and 10 or more years.
  29. Treasury Inflation Protected Securities (TIPS)
    U. S. Treasury securities with face values that rise when the economy experiences inflation.
  30. Debt Service
    The cost of maintaining a debt; generally measured in interest costs.
  31. Crowding Out
    Occurs when borrowing by the federal government reduces borrowing by households and businesses.
Card Set
Econ ch 6
econ ch 6 vocab