Study Guide II Flashcards
Durable Good
A consumer good with expected life (use) of three or more years
Nondurable Good
A consumer good with an expected life (use) of less than three years
Transfer Payment
A payment made or income received in which no goods or services are being paid for, such as a benefit payment or subsidy
Marginal Tax Rate
The tax rate paid on an additional dollar of income
Intermediate Goods
Products that are purchased for resale or further processing or manufacturing
Tax loopholes
A provision in the laws governing taxation that allows people to reduce their taxes
Stagflation
A condition of slow economic growth and relatively high unemployment
Social good
A good or service that benefits the largest number of people in the largest possible way
Monetary policy
A central bank’s changing of the money supply to influence interest rates and assist the economy in achieving price stability; espoused by advocates of a monetary rule
Phillips curve(graph)
A curve showing the relationship between the unemployment rate (on a horizontal axis) and the annual rate of increase in the price level (on the vertical axis)
Partnership
An unincorporated firm owned and operated by two or more persons
Disinflation
A reduction in the rate of inflation
Keynesianism
Theories about how in the short run – and especially during recessions – economic output is strongly influenced by total spending in the economy
Value added tax (VAT)
type of consumption tax that is placed on a product whenever value is added at a stage of production and at the point of retail sale
Tax Indexing
The adjustment of the various rates of taxation done in response to inflation and to avoid bracket creep
Budget Deficit
The amount by which the expenditures of the Federal government exceed its revenues in any year
Trade deficit
The amount by which a nation’s imports of goods (or good and services) exceed its exports of goods (or goods and services)
Gross domestic product (GDP)
The total market value of all final goods and services produced annually within the boundaries of the United States, whether by U.S.- or foreign-supplied resources
Personal Income (PI)
The earned and unearned income available to resource suppliers and others before the payment of personal taxes
Disposable income (DI)
Personal income less personal taxes; income avaialble for personal consumption expenditures and personal saving
Smoot Hawey Tarif
Legislation passed in 1930 that established very high tariffs. Its objective was to reduce imports and stimulate the domestic economy, but it resulted only in retaliatory tariffs by other nations
European Union (EU)
An association of 27 European nations (as of 2010) that has eliminated tariffs and quotas among them, established common tariffs for imported goods from outside the member nations, eliminated barriers to the free movement of capital, and created other common economic policies
Gross national product (GNP)
An estimate of total value of all the final products and services produced in a given period by the means of production owned by a country’s residents
National income (NI)
The total amount of money earned within a country
NAFTA
An agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries
General agreements on tariff and trade (GATT)
a trade treaty implemented to boost economic recovery. The primary purpose of GATT was to increase international trade through by eliminating or reducing various tariffs, quotas and subsidies while maintaining meaningful regulation
Earned income tax credit (EITC)
a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient’s income and number of children
General agreements on tariff and trade (GATT)
A trade treaty implemented to boost economic recovery. The primary purpose of GATT was to increase international trade through by eliminating or reducing various tariffs, quotas and subsidies while maintaining meaningful regulation
Earned income tax credit (EITC)
A refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient’s income and number of children
National bureau of economic research (NBER)
an American private nonprofit research organization “committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community
Brexit
An abbreviation for “British exit,” referring to the UK’s decision in a June 23, 2016 referendum to leave the European Union (EU)
