econ 3-4 quiz taxes

Question 1

budget surplus

Answer 1

when income is greater than spending

Question 2

budget deficit

Answer 2

when spending is greater than income

Question 3

balanced budget

Answer 3

when revenue is equal to or greater than total expenses

Question 4

fiscal policy

Answer 4

use of government spending and taxation to influence the economy

Question 5

keynesian economics

Answer 5

economic theory that states that aggregate demand is the primary driver of an economy

Question 6

deficit spending

Answer 6

when gov spends more money than they receive in revenue

Question 7

austerity

Answer 7

set of economic policies that governments use to reduce their budget deficits

Question 8

multiplier effect

Answer 8

idea that small change in one economic factor can cause a much larger change in another factor

Question 9

debt

Answer 9

sum of money borrowed for a certain period of time and will be returned with interest

Question 10

deficit

Answer 10

when the government spending exceeds its revenues

Question 11

mandatory spending

Answer 11

government expenditures that are required by existing laws

Question 12

discretionary spending

Answer 12

money spent on non essential items

Question 13

federal reserve

Answer 13

the us central bank

Question 14

monetary policy

Answer 14

set of actions to control a nations overall money supply and achieve economic growth

Question 15

reserve requirement

Answer 15

minimum amount of money a bank must keep in cash as a percentage of its total deposits

Question 16

federal funds rate (discount rate)

Answer 16

interest rate that banks charge eachother when lending reserve balances overnight

Question 17

open market operations

Answer 17

market that features free competition and prices determined by supply and demand

Question 18

credit score

Answer 18

number that represents a persons creditworthiness and likelihood of paying back a loan

Question 19

annual percentage rate (apr)

Answer 19

yearly interest generated from a loan or earned on an investment (total annual cost of borrowing money, as a percentage)

Question 20

credit card

Answer 20

card that lets you borrow money from the provider to make a purchase that you pay back later

Question 21

debit card

Answer 21

card that lets you use money directly from your bank account to make a purchase. money is deducted immediately

Question 22

checking account

Answer 22

financial account that one can use to make everyday purchases without using cash

Question 23

saving account

Answer 23

account at a bank that is designed to hold money

Question 24

progressive tax

Answer 24

tax that takes a larger percentage of income from high income groups

Question 25

regressive tax

Answer 25

tax that takes a larger percentage of income from low income groups

Question 26

proportional tax

Answer 26

tax where all income levels are taxed at the same rate

Question 27

federal income tax

Answer 27

tax from government on annual earnings of legal entities based on income level

Question 28

state income tax

Answer 28

percentage of money that you pay to the state government based on the income you make at your job

Question 29

corporate taxes

Answer 29

direct tax levied on income or capital of corporations

Question 30

payroll taxes

Answer 30

tax paid on wages and salaries of employees to finance programs like social secuirty and medicare

Question 31

capital gains taxes

Answer 31

taxes levied on earnings made from sale of assets

Question 32

property taxes

Answer 32

tax levied on immovable property like land and buildings, as well as movable property like vehicles

Question 33

sales taxes

Answer 33

consumption tax on the sale of goods as services charged as a percentage of retail cost

Question 34

tax deductions

Answer 34

a provision that reduces taxable income

Question 35

tax credits

Answer 35

provision that reduces a tax payers final tax bill

Question 36

tax avoidance

Answer 36

action taken to lessen tax liability and maximize after-tax income

Question 37

tax evasion

Answer 37

failure to pay or underpayment of taxes

Question 38

tax base

Answer 38

total value of all assets, income, and economic activity that can be taxed

Question 39

marginal tax rate (tax bracket)

Answer 39

amount of additional tax paid for every additional dollar earned as income

Question 40

effective tax rate

Answer 40

average tax rate for an individual or corporate taxpayer