Unit 4 Vocab- HNRS.ECON

Progressive Tax

A tax in which the percentage of income you pay increases as your income increases.

Regressive Tax

A tax in which the percentage of income you pay decreases as your income increases.

Flat Tax

A tax in which everyone pays the same percentage of income; also called a Proportional Tax.

Appropriations Bill

A bill that proposes the spending of money.

Medicaid

The medical assistance program which helps many Americans, particularly those with low incomes, get the medical treatments they need.

Medicare

The medical assistance program which helps many Americans, particularly the elderly and disabled, get the medical treatments they need.

Budget Deficit

When the government spends more money than it takes in; spending is greater than revenue.

Budget Surplus

When the government spends less money than it takes in; spending is less than revenue.

FICA

A tax paid by employers that partly funds Social Security and Medicare.

Mandatory Spending

The portion of the budget that the government is required by law to spend.

Discretionary Spending

The portion of the budget that the government can choose whether or not to spend.

National Debt

The total of all the money owed by a country for all years.

Entitlements

Government programs that provide a guaranteed benefit to anyone who meets preset requirements.

Fiscal Policy

The way in which the actions of the government influence and affect the economy.

Deregulation

The removal of government restrictions.

Aggregate Supply

The total of all goods and services businesses are willing and able to supply at all price levels.

Aggregate Demand

The total of all goods and services consumers are willing and able to buy at all price levels.

Absolute Advantage

Being able to produce a good or service more efficiently at a lower total cost.

Comparative Advantage

Being able to produce a good or service at a lower opportunity cost.

Trade Barrier

Anything that interferes with the importing and exporting of goods and services.

Protectionism

The idea that it is more important to protect domestic jobs than to encourage the removal of trade barriers.

Free Trade

The idea that it is more important to encourage the removal of trade barriers than to protect domestic jobs.

USMCA

A trade agreement between the United States, Mexico, and Canada to remove trade barriers between them.

Fixed Exchange Rates

When the exchange rate between two countries’ currencies is held constant and not allowed to fluctuate.

Flexible Exchange Rates

When the exchange rate between two countries’ currencies is allowed to fluctuate with the foreign exchange market.

Appreciation

An increase in the value of a country’s currency.

Depreciation

A decrease in the value of a country’s currency.

Balance of Trade

A comparison of the exports and imports of a country.

Trade Deficit

When a country’s imports are greater than its exports.

Trade Surplus

When a country’s exports are greater than its imports.

World Trade Organization

An organization dedicated to encouraging the reduction and removal of trade barriers around the world.

Cartel

A formal organization of businesses in a market that collude together to increase their profits.