Pt 3: Chapter 15 Vocab Flashcards
The situation in which the government’s tax and other revenues for the year are roughly equal to its expenditures
Balanced budget
The situation in which the government’s expenditures exceed its tax and other revenues
Budget deficit
The tax that individuals pay on money gained from the sale of a capital asset, such as property or stocks
Capital-gains tax
A form of fiscal policy that emphasizes “____” (consumer spending). Govt can use increased spending or tax cuts to place more money in consumers’ hands and thereby increase demand
Demand-side economics
The rescinding of excessive government regulations for the purpose of improving economic efficiency
Deregulation
A very severe and sustained economic downturn. Very rare in the US: the last one was in the 1930s
Economic depression
An economic principle holding that firms should fulfill as as many of society’s needs as possible while using as few of its resources as possible. the greater the output for a given input.
Economic efficiency
The situation in which the outcome of an economic transaction is fair to each party. An outcome can usually be considered fair if each party enters into a transaction freely and is not unknowingly at a disadvantage.
Economic equity
A moderate but sustained downturn in the economy. Part of the economy’s normal cycle of ups and downs
Economic recession
A system for the exchange of goods and services between the producers of those goods and services and the consumers of them
Economy
Burdens that society incurs when firms fail to pay the full costs of production. An ex is the pollution that results when corporations dump industrial wastes into lakes and rivers.
Externalities
A tool of economic management by which government can attempt to maintain a stable economy through its taxing and spending policies
Fiscal policy
A tax on personal income in which the tax rate increases as income increases; in other words, the tax rate is higher for higher income levels
Graduated personal income tax
A general increase in the average level of prices of goods and services
Inflation
A classic economy philosophy holding that owners of business should be allowed to make their own production and distribution decisions without government regulation or control.
Laissez-faire economics
