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Flashcards in Chapter 20 Deck (29)
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1

taxable income

total income of an individual minus certain deductions and personal exemptions

2

a dependent

one who depends primarily on another person for such things as food, clothing and shelter

3

progressive tax

based on a taxpayer's ability to pay

4

withholding

the money an employer withholds from workers' wages as payment of anticipated income tax

5

IRS

a bureau that collects income tax through its regional centers

6

audit

check more closely

7

social insurance taxes

the money collected by the gov't to pay for major social programs

8

regressive tax

tax in which people with lower incomes pay a larger portion of their income

9

excise taxes

taxes on the manufacture, transportation, sale, or consumption of goods and the performance of services

10

customs duties

taxed levied on goods imported into the US

11

protective tariff

high customs duty

12

securities

financial instruments that include bonds notes, and treasury bills

13

national debt

gov't borrowing money to fund annual budget deficits over time

14

Office of Management and Budget (2)

- responsible for preparation of the budget
- confers with the president on a wide range of budgetary matters

15

uncontrollables

expenditures required by law or resulting from previous budgetary commitments

16

entitlements

benefits that Congress has provided by to individuals

17

Congressional Budget Act of 1974 (created what? what did that creation do?)

- CBO
- carefully evaluate the overall federal budget for Congress

18

Gramm-Rudman-Hollings Act

forced the president and Congress to work together to reduce budget deficits

19

Budgetary Enforcement Act of 1990

divided the budget into 3 areas: domestic policy, defense, and internal affairs

20

Where the money goes/Expenditures (3)

- direct benefits payments (Social Security, social welfare/health care programs, and uncontrollable expenditures)
- national defense
- discretionary spending (environment, transportation, criminal justice)

21

Expenditures

government spending of revenues

22

Fiscal Policy

using gov't spending and taxation to influence the economy

23

gross national product

sum of all goods and services produced in the nation in a year

24

Monetary Policy

involves controlling the supply of money and credit to influence the economy

25

The Federal Reserve System (Fed)

central banking system of the United States

26

Board of Governors

supervises the entire Federal Reserve System

27

discount rate

the rate the Fed charges member banks for loans

28

reserve requirement

the % of money member banks must keep in Federal Reserve Banks as a reserve against their deposits

29

open market operations

the means the Federal Reserve System uses to affect the economy by buying or selling gov't securities on the open markey