Econ Ch. 32 cont

What is meant by proportional tax?

a tax that is a flat percentage of income earned, regardless of level of income

The federal government levies _____________________________ on people who pass assets ____________________________, either after death or during life.

an estate and gift tax; to the next generation

If an economy moves into a recession, causing that country to produce less than potential GDP, then

automatic stabilizers will cause tax revenue to decrease and government spending to increase

A typical ____________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes.

contractionary

By June, 2010, the U.S. government owed $13.6 trillion dollars ________________ that, over time, has remained unpaid.

in accumulated government debt

If a country's GDP increases, but its debt decreases during that year, then the country's debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes.

increase or decrease

What name is given to a tax based on the income of all forms received by individuals?

individual income tax

If government tax policy requires Jane to pay $25,000 in taxes on annual income of $200,000 and Mary to pay $10,000 in tax on annual income of $100,000, then the tax policy is

progressive

When a country's economy is producing at a level that exceeds its potential GDP, the standardized employment budget will show a __________________ than the actual budget.

smaller deficit

When inflation begins to climb to unacceptable levels in the economy, the government should

use contractionary fiscal policy to shift aggregate demand to the right