Chapter 20 Flashcards

1
Q

taxable income

A

total income of an individual minus certain deductions and personal exemptions

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2
Q

a dependent

A

one who depends primarily on another person for such things as food, clothing and shelter

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3
Q

progressive tax

A

based on a taxpayer’s ability to pay

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4
Q

withholding

A

the money an employer withholds from workers’ wages as payment of anticipated income tax

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5
Q

IRS

A

a bureau that collects income tax through its regional centers

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6
Q

audit

A

check more closely

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7
Q

social insurance taxes

A

the money collected by the gov’t to pay for major social programs

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8
Q

regressive tax

A

tax in which people with lower incomes pay a larger portion of their income

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9
Q

excise taxes

A

taxes on the manufacture, transportation, sale, or consumption of goods and the performance of services

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10
Q

customs duties

A

taxed levied on goods imported into the US

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11
Q

protective tariff

A

high customs duty

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12
Q

securities

A

financial instruments that include bonds notes, and treasury bills

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13
Q

national debt

A

gov’t borrowing money to fund annual budget deficits over time

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14
Q

Office of Management and Budget (2)

A
  • responsible for preparation of the budget

- confers with the president on a wide range of budgetary matters

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15
Q

uncontrollables

A

expenditures required by law or resulting from previous budgetary commitments

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16
Q

entitlements

A

benefits that Congress has provided by to individuals

17
Q

Congressional Budget Act of 1974 (created what? what did that creation do?)

A
  • CBO

- carefully evaluate the overall federal budget for Congress

18
Q

Gramm-Rudman-Hollings Act

A

forced the president and Congress to work together to reduce budget deficits

19
Q

Budgetary Enforcement Act of 1990

A

divided the budget into 3 areas: domestic policy, defense, and internal affairs

20
Q

Where the money goes/Expenditures (3)

A
  • direct benefits payments (Social Security, social welfare/health care programs, and uncontrollable expenditures)
  • national defense
  • discretionary spending (environment, transportation, criminal justice)
21
Q

Expenditures

A

government spending of revenues

22
Q

Fiscal Policy

A

using gov’t spending and taxation to influence the economy

23
Q

gross national product

A

sum of all goods and services produced in the nation in a year

24
Q

Monetary Policy

A

involves controlling the supply of money and credit to influence the economy

25
The Federal Reserve System (Fed)
central banking system of the United States
26
Board of Governors
supervises the entire Federal Reserve System
27
discount rate
the rate the Fed charges member banks for loans
28
reserve requirement
the % of money member banks must keep in Federal Reserve Banks as a reserve against their deposits
29
open market operations
the means the Federal Reserve System uses to affect the economy by buying or selling gov't securities on the open markey