Econ final

government has 3 najor sources where it gets its Money fron

Fees, for gavernment services or user charges

Taxes

Borowing

FeeBand tayes are the government Main income

TaX base = value of goods weath or income

Subject to taxation

Tax rate the proportion of a tax buse that musT be quid to a government as tates masica Tax cates, the change intle tay payrenT divide by the mange in incone

chang in taxescue

marsinal cate

change in taxable income

tax bracket= income to chich a specific are unique massiml tax rat is appleid

Average = the total tax payment divided by total income

proportional tayations regardless ot tax buse the percentage is

progressive tayutim = Type of tapation as i noseys the save

increases a hisher pescentage is fuid

Marginal tay Cate 7 Averye rax late

regressive tagation = Type ot Tax as more dollars earned

the pescentage of tax paid on tem falls

Money - any mediur that is univesally accepted

ссолому

both by selless o1 goods and

sevices as pay ment tor those yoes ano

sesvices and o creditors as pament foc debts Functions of Monex - medium of exchange, unit of acconting mit ot accounting, store of value, standard of deferend

раумелт

rediven of exchange, any iter that sellers will acept

barte = the direct exanage ot 9o0ds and services

tor other goods and services withont the use ot mone

store value - abilityto hole value oves time

money is te most liquid asseT

Fiscal policy = the discretionary changing of government

exweraitures of taxs in order to acieve national

econnomic gouls, such as = High employment togen

price stability

Economic growth

Discretionary Riseal policy an increae in goverment sperding will stimulute econoic altivity

Changes in goverment spelding military spending

Eudcation spending

Bugedtes for youerrent asencies

Fiscal policy questions

How use expendituers fineanced and by whom

They are financed by tayes. people uno pay taxes it taxes are increused what does the yoverment

do withe the Taxes? = fund public servies.

reduce national debt

perment income thear y = individual consumption

deperds on denticipated liletion income

Tea Fiscal polily has Time lags

Deficit spending and the public DebT

Goverrent budyet deficit = it te goverment sperds

more than it receives in taxes daring a period ottime the federal deficit is a flow vurable one deired for a specitic perida of time usally ore year it sperding equals recipes me budget is bulanced

Balanced budget government spending is exactly equal to the total taxes and reverues it collects daring a period ot time

Goverment budet saples an excess at governert reverues over soverment spending during a given period of tinne

public debt - A stock varable

te total value ot all oustanding federul goverment securities

Gross public debt - All federal goverment debt

Goss public debt minus all goverment interagery borrowing

Tax révenues tea to be stanant daring rimes

06 slow coonic grounth

Tax reveres grow more quille wher overall grouth penhances incomes