Unit 1 Section 2 - The American Economy (Command)

American Economy

incorporates main characteristics of free enterprise economy (Market) and limited government involvement

Progressive Tax

A tax for which the percentage of income paid in taxes increases as income increases

Regressive tax

A tax for which the percentage of income paid in taxes decreases as income increases

Proportional tax

a tax for which the percentage of income paid in taxes remains the same for all income levels

Redistribution of income

The transfer of income through government taxation, spending and assistance programs targeted at particular income groups. The goal is to transfer money from higher-income groups to lower-income groups.

public goods and services

Goods and services provided by a government for the use of all people.

Federal Government

A form of government in which powers are divided between a central government, state government and several local governments.

local government

government on the county, city, town, village, or district level (school)

state government

government that conducts the business of the state