Chapter 21-22 Flashcards
Economic Growth
an increase in real GDP over time
Inequality
the unequal distribution of income and opportunity between different groups in society
Poverty
when people lack basic necessities and exist in poor conditions
Income
includes all the money that people earn from wages, salaries, interest from savings and bonds, dividends earned from the ownership of stocks and shares, rent and the money that people gain from selling assets for more than the assets cost (capital gains).
Wealth
referred to as “net worth” and is the value of all of a person’s total assets minus their total liabilities
Assets
includes houses and property, money in savings accounts, investments in stocks and bonds, and retirement savings
Liabilities
includes all the debts that a person owes, including things like mortgages, student loans, car loans, and credit card debts
Absolute Poverty
when the income of a person, or household, is not enough for them to meet even their basic needs of shelter, food, safe drinking water, health and education
Relative Poverty
a comparative measure based on the living standards in a particular country
Social Mobility
the ability for of people or households to move up or down the socio-economic ladder
Intragenerational Social Mobility
the ability of an individual to move from one income level to a higher income level within their own lifetime
Intergenerational Social Mobility
the ability of a person to move to a higher level of income than their parents
Equity
the idea of fairness in a society
Indirect Taxes
taxes imposed to reduce the consumption of a good whose consumption creates negative externalities
Direct Taxes
taxes that can be raised or lowered to change aggregate demand in the economy and achieve macroeconomic goals (taxed on all citizens based on their incomes)
Progressive Taxes
as income rises, people will pay a higher percentage of it as a tax and someone with a low income will pay a small amount of that as tax
Property Taxes
a tax that reflects that price of your home or property, the more valuable, the higher the tax
Corporate Taxes
taxing on the profits of businesses and firms
Tax Deductions
when taxes are reduced for consumers because they are used in other justified manners and should not be taxed upon
Universal Basic Income
when all citizens in an economy receive a guaranteed set amount of money each week or month with no conditions or eligibility requirements
