Chapter 14 Vocab
A mandatory payment to a government
Tax
The total amount of money that the national government owes
National Debt
What is the purpose of a tax incentive?
To encourage or discourage certain behaviors
Encourage: tax credits for business
Discourage: high taxes on cigarettes, alcohol
What are the two basic goals of fiscal policy?
To increase aggregate demand
Fight inflation
What animal has the longest lifespan?
Bowhead whale- can live up to 200 years!
What is Customs Duty?
Tax on goods imported to the United States
What are automatic stabilizers?
Policy features that work to automatically stabilize the economy
ex. Unemployment benefits
What is the role of the IRA in relation to Federal taxes?
It receives tax money for the government, and administers payments
How do budget deficits affect the national debt?
Budget deficits (when we are spending more than we have) adds to the national debt
Who is the most decorated Olympian of all time?
Michael Phelps- 32 medals
What are appropriations?
Specific amounts of money set aside for specific purposes
Congressional bills for government spending
A graph that illustrates the economist Arthur Laffer's theory of how tax cuts affect tax revenues
Laffer Curve
What is the difference between mandatory spending and discretionary spending?
Mandatory spending is required by current law.
Discretionary spending has to be authorized year by year (voted on by Congress)
What is the role of the Council of Economic Advisors?
To advise the President on matters of economic policy
What planet is closest to the sun?
Mercury
What is FICA?
Federal Insurance Contributions Act.
A payroll tax that provides coverage to the elderly, the unemployed due to disability, and surviving family members of wage earners who have died
Uses taxes and government spending to affect the economy
Fiscal Policy
What is the difference between a progressive tax and a regressive tax?
Progressive places a higher percentage of taxation on higher earners. (The more you make, you are taxed at a higher percentage)
Regressive takes a larger percentage of income from low income earners (sales tax example- the tax takes more of my money than a millionaires)
How did the Great Depression influence Keynesian Economics?
The period of depression introduced the idea that the government may need to help influence the economy
What is the smallest country in the world? What is the largest
Vatican City
Russia
Transfer payment from the Federal Government to state and local governments
Used for specific activities like highway funding, school funding and social services
Grant in Aid
What are Keynesian Economics?
States the aggregate demand needs to be stimulated by government action
Government needs to help stimulate the economy during times of recession
How are payroll taxes and user fees different?
Payroll taxes: Based on income
User Fees: Based on use of a product
What are two causes of national deficit?
National emergencies, need for public goods and services, stabilization of the economy, role of the government in society
Who did Forbes name the "youngest self made billionaire ever" in 2019?
Kylie Jenner