Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

economics year 11 - semester 2 > Public Sector and Taxation 7 (J) done > Flashcards

Public Sector and Taxation 7 (J) done Flashcards

1
Q

public sector definition

A

the part of the economy that provides government services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

examples of government services

A

defence, border protection, law and order, transport, education, health

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

percentage of AE government spending accounts for

A

25%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

government role and responsibilities

A

provision of public goods and services, welfare, regulation of business enterprises, monetary (fiscal and monetary) management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

4 roles of the government in a modified market economy

A
  1. allocative role
  2. redistributive role
  3. regulatory role
  4. management of aggregate supply
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

allocative role definition

A

allocate resources to goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

allocative role more + examples

A
  • public goods (eg lighthouse) and social justice
  • merit good (eg. education)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

redistribute role defintition

A

use tax and transfer system to achieve equity under provided by the private sector in income distribution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

redistributive role more + examples

A
  • social justice (horizontal equity, equal opportunities, anti-discrimination)
  • social harmony
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

regulatory role definition

A

fix up or prevent market failure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

regulatory role more + examples

A
  • monopoly power (eg supermarkets)
  • negative externalities (eg smoking)
  • information gaps (eg insurance)
  • natural monopolies (eg water supply)
  • common property resource (eg fish)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

management of aggregate demand definition

A

use of fiscal policy and supply side measures to control the business cycle and achieve macroeconomic objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

management of aggregate demand more

A
  • economic growth
  • price stability
  • full employment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

taxation definition

A

the payment to the government for which no goods and/or services are directly received

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

most government activity is financed by

A

taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

four main functions of taxation

A
  1. raising revenue
  2. stabilise cyclical economic activity
  3. redistribution of income
  4. allocation of resources
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

function of tax - raising revenue

A

tax makes up for approximatly 90% of revenue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

function of tax - stabilise cyclical economic activity

A

at times of strong growth higher tax rates reduce disposable income and in the downturn tax falls at a faster rate than income (automatic stabilisers)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

function of tax - redistribution of income

A

through a progressive system of income tax high income earners pay a higher rate of tax. (eg rich assist poor and elderly through welfare payments)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

function of tax - allocation of resources

A

all taxes will distort the allocation of resources in that they will affect peoples incentive to work, spend and save. certain sectors can be encouraged or discouraged by their taxation treatment. eg tobacco and alcohol.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

impact definition

A

initial burden of tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

incidence definition

A

ultimate burden of tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

who does impact of tax fall on

A

person from whom the tax is collected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

who does incidence of tax fall on

A

person who eventually pays tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
example: GST or consumption tax. impact and incidence?
impact: producer or retailer incidence: consumer
26
direct tax
impact and incidence fall on same person. eg income tax
27
direct tax examples
- income tax - fringe benefits tax - company tax - capital gains tax
28
indirect tax
impact and incidence are separate. impact is generally on producer. incidence is generally on consumer
29
indirect tax example
- GST - excise tax - vehicle transfer tax
30
3 sources of tax revenue
1. Income tax 2. Tax on goods and services 3. Capital gains tax
31
Income tax is split into
a. income tax b. company tax c. fringe benefit tax
32
1a income tax
levied on all wage and salary income at rates which specify how much of the last (marginal) dollar will be paid as tax
33
1a income tax direct or indirect?
direct
34
1a income tax impact and incidence?
impact: individual incidence: individual
35
1a income tax, type of tax
progressive
36
1b company tax
levied onto the profits of the company (25c in the dollar)
37
1b company tax direct or indirect?
direct
38
1b company tax impact and incidence?
impact: company incidence: consumer
39
1b company tax, type of tax
proportional
40
1c fringe benefit tax
levied on the value of non cash benefits given to employees as part of their salary package (company cars, laptops, rent)
41
1c fringe benefit tax direct or indirect?
direct
42
1c fringe benefit tax impact and incidence?
impact: individual incidence: individual
43
1c fringe benefit tax, type of tax
progressive
44
Tax on goods and services is split into
a. GST b. excise tax
45
2a GST
broad based tax levied at 10% of most goods and services
46
2a GST direct or indirect tax
indirect
47
2a GST impact and incidence
impact: seller incidence: consumer
48
2a GST, type of tax
regressive tax
49
2b excise tax
imposed as a flat rate on domestically produced goods (tobacco and alcohol) levied on price inelastic goods
50
2b excise tax direct or indirect tax
indirect
51
2b excise tax impact and incidence
impact: seller incidence: consumer
52
2b, excise tax type of tax
proportional tax
53
3a capital gain tax
levied on all capital gains (profits) from the sale of assets held for longer than 12 months and is adjusted for inflation
54
3a capital gain tax direct or indirect
indirect
55
3a capital gain tax impact and incidence
impact: seller incidence: consumer
56
3a capital gains tax, type of tax
progressive
57
3 types of tax
1. progressive 2. proportional 3. regressive
58
progressive tax
rate of tax increases as income increases eg. income tax
59
proportional tax
rate of tax remains the same as income rises more profit you earn get taxed a higher proportion of your profit eg. company tax
60
regressive tax
rate of tax reduced as income rises eg. proportion of gst tax is greater to those on lower incomes
61
reward:
the income is a payment for the contribution to the production process (profit)
62
incentive:
chance to earn a higher wage / income from another job
63
how much of Commonwealth government spending is linked to redistributive function
2/3
64
Commonwealth gov aims to balance ________(efficiency) with ________ (equity)
economic growth justice
65
Lorenz curve shows
proportion of national income earned by a given percentage (different sections) of the population eg, what proportion of income is earned by the top 10% of population
66
Lorenz curve straight diagonal line
line of equality
67
greater the gap between the line of equality and the curve the greater then degree of _____
inequality
68
gini coefficient
measure of statistical dispersion intended to represent the income inequality within a nation moves from 0 (line of equality) to 1 (most unequal distribution of income)
69
4 principles of taxation
1. equity 2. efficiency 3. simplicity and certainty 4. convienence and economy
70
principle of tax - equity
a. horizontal equity people earning same income should pay same taxes. ensures no discrimination and equal opportunity b. vertical equality people on higher income levels should pay tax at a higher rate
71
principle of tax - effiency
will it effect the performance of the economy, relates to the effect of taxation on the allocation of resources.
72
principle of tax - simplicity and certainty
can taxpayers understand their liability without too much effort. tax system should be easily understood.
73
principles of tax - connivence and economy
its relatively cheap for the gov to collect tax. method of collection should be as convenient as possible for taxpayers and those responsible for collection.
74
6 factors affecting income distribution
1. level of education 2. age 3. gender 4. discrimnation 5. inherence 6. attitude to work
75
6 methods used by gov to redistribute income
1. taxation - horizontal, vertical equity 2. transfer payments - welfare, ue benefits, pension 3. provision of collective (merit) goods and services - education, health care, housing 4. legislation to guarantee minimum wage 5. anti discrimination and equal opportunity 6. affirmative action policies

economics year 11 - semester 2 (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions