Econs ALL POLICIES (definitions)

Indirect tax (definition)

A tax levied on goods and services

What are the types of indirect taxes

1) Specific tax

2) Ad valorem tax

Specific tax (definition)

A fixed amount of tax per unit of the commodity

Ad valorem tax (definition)

Calculated as a percentage of the sales price of the commodity

Quantity Controls / Quota (definition)

An upper limit on the quantity of a good that can be bought or sold

Moral Suasion (meaning)

The use of persuasion rather than coercion or legislation, to influence the activity of economic agents

Subsidy (meaning)

A form of financial aid or support extended to firms or consumers with the aim of promoting an economic objective

Direct taxes (definition)

Taxes that are levied on income and profits of an individual or organisation

Price ceiling (definition)

A legally established maximum price that is set below the equilibrium price

Price floor (definition)

A legally established minimum price that is set above the market equilibrium price

What is the Foreign Worker Levy (understanding)

A pricing mechanism to regulate the number of foreign workers in Singapore

Direct provision (meaning)

When the government provides public goods for free by financing its production using tax revenues

Permit (meaning)

The imposition of legal maximums on the amount of (something) firms are allowed to produce

Nationalisation (definition)

The act of a government taking control of an industry into the ownership of the state

Co-payment (meaning)

A contribution made by an insured person towards the cost of medical treatment or other services

Fiscal policy (definition)

Involves the altering of government expenditure and/or tax revenue to affect the level of economic activity in the economy

Monetary policy (definition)

The adjustment of interest rates via the regulation of the money supply in a country

Exchange rate policy (definition)

The deliberate attempt by the Central Bank to manipulate the exchange rate of a country’s currency in order to influence the economy

Expenditure-reducing policies (definition)

Reducing the level of expenditure on imports which can be brought about by contractionary monetary and fiscal policies

Expenditure-switching (policies)

The use of exchange rates and protectionism to induce both local and foreign economic agents to switch away from foreign produced to domestically produced goods

Protectionism (definition)

The policy of protecting domestic industries against foreign competition by limiting imports or promoting exports via the use of trade barriers

Tariff (definition)

An indirect tax imposed on imported goods or services

Import quotas (definition)

A physical limitation on the quantity of a commodity which is allowed to enter the country in a given year

Lump-sum taxes (definition)

A once and for all or one-time tax payment that is imposed on a firm (increase fixed cost)