Eco ILA 1 (1out 2)

a___denotes the total level or amount of something at a particular point in time. On the other hand, a ____is the change to the stock of that something over a period of time

stock; flow

in choosing which type of tax to use, a government takes into consideration many factors, typically including two:

fairness the ease with which taxes can be collected

ignoring the states___income taxes are progressive

federal

daniel has an annual taxable income of $25,000 and pays $2,500 a year in income taxes. Julia earns $30,000 in taxable income a year and pays $4,000 in income taxes . The tax is

progressive

federal government taxes are

progressive

a ___ tax is one in which the average tax rate stays the same as income increase

proportional

daniel has an annual taxable income of $25,000 and pays $2,500 a year in income taxes. Julia earns $55,000 in taxable income a year and pays $5,500 in income taxes. This tax is ___

proportional

average tax rate

the total amount of tax paid divided by taxable income and expressed as a percentage

the ___of tax is determined by using the average tax rate

type

Generally, the budget deficit is calculated and reported____and the national debt is the accumulation of budget

yearly, deficits

sales taxes are___in that the tax rate falls as the amount taxed rises

regressive

because it places the deficit in better context and allows a comparison across time or across governments from different countries, most economists prefer measuring the deficit

relative to GDP

if the demand for loanable funds increases, interest rates____which can have big effects on consumers

rise

At the state government level, the main sources income are

sales and excise taxes state individual and corporate income taxes

in the circular flow model households____resources and ___products

sell and buy

at the federal government level, the main source of income are

social insurance and retirement receipts payroll taxes

At the federal government level, the main sources of income are

social insurances and retirement reciepts payroll taxes

interest on the national debt is a major expenditure for the federal government, which indicates that the federal government

spends more than it receives in revenue, forcing it to borrow to finance its deficits

regressive tax

a tax in which the average tax rate decrease as taxable income increase (and increases as taxable income decreases)

progressive tax

a tax in which the average tax rate increase as taxable income increase (and decrease as taxable income decrease)

proportional tax

a tax in which the average tax rate remains constant with either increases or decreases in taxable income

Daniel has annual taxable income of $20,000 and pays $2,500 a year in federal income taxes. Daniel's average tax rate is ___percent

12.5

sources of revenue are the same federal, state and local government

False

The federal government orders production of a new sealth fighter jet that it will use to defend the country

The government is making a monetary payment in the product market, buying output that it uses to provide national defense for the country. the government payment Is an expenditure.

The city of Chicago is hiring teachers so that it can provide education to school children

The government is making a monetary payment in the resource market, hiring labor that it uses to provide children in the community with an education. the government payment is an expenditure.

The city of Springfield buys land from Mr Burns so that it can build a new basesball stadium for its home team, the isatopes

The government is making a monetary payment in the resources market, buying land that it will use to provide citizens with entertainment. The government payment is an expenditure

Ms Corn is a corn producer in Nebraska. To encourage her to produce more corn, the federal government sends her a check to offset part of her cost production.

The government is making a monetary payment, it is not going through either the product or resource market. The government payment is subsidy.

Mrs Garner recieves monthly workers compensation benefit check, which she uses to help payer her bills until she can return to work

The government is-- making a payment Which market is involved? We call this payment--

Most local governments receive finanical support from the federal and state levels

True

budget deficit

a situation in which a government receives less revenue than it spends in a given fiscal

an opportunity cost is associated with the interest payments made on the national

debt

if the government had not national ___it would not have to make interest payments, and other things could be done with the funds

debt

Budget____are equal to the difference between the government revenue and its expenditures in any given fiscal year

deficits

Budget___are calculated and reported on an annual basis

deficits

an average tax equals the amount of tax paid, ___ by income and multiplied by 100

divided

a budget is balanced when the governments revenue ___what the government spends in any given fiscal year

equals

the government budget may be ___in ___or in ___

balanced; deficit; surplus

the federal government finances its deficts via

borrowing

The surplus and/or deficit is a ___because we measure the surplus or deficit at each fiscal year. National debt is a ___showing how much the government owes at a particular point in time

flow; stock

most federal spending government in four areas

health national defense interest on the national debt pensions and income security

the circular flow model with the government added uses net taxes because

households and firms receive transfer payments and subsides from the government

suppose that tax revenue is $300 billion and that government spending is $350 billion. The budget is:

in deficit

A progressive tax is one in which the average tax rate ____as income increases

increases

When the government needs to borrow money, it ___the demand for loanable funds in the economy

increases

an example of a public good by the government is

national defense

a budget ___occurs when a government receives more revenue than it spends in any given fiscal year

surplus

federal budget___are rare

surpluses

national debt

the accumulation of all previous budget deficits and budget surpluses experienced by a government

Mrs Butterworth recieves her monthly social security check, which she uses to help pay her bills now that she has retired

the government is making a monetary payment, but it is not going through either the product or resource market and Mrs Butterworth is not producing anything in exchange for the money. The government payment is a transfer payment.

Theo's excitment about his first job fades a bit when he opens his first paycheck and finds that the amount is less than expected due to the income taxes and payroll taxes that were deducted

the government is receiving a monetary payment from a household, but is not going through either the product or the resource market to receive it. Income taxes and payroll taxes occur when income is earned from wages. We call these payment taxes on.