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.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 influences and affects 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.