SPEA V-186 Exam 2 Questions and Correct
Answers
tax base
-deals with what the tax is being imposed on
-ex.) income, payroll, consumption, sales, etc.
tax
a mandatory payment to the gov. for which no product or service is received
collectability
-how easy it is to collect a tax
-its easier to pay taxes when its easy to figure out
DWL when dealing with economic impacts
-taxes create DWL
-DWL grows with the square of the tax rate
Regulatory and Environmental taxes
deals with pollution and ozone depleting taxes, aims to reduce use of goods with negative
externalities
benefit based taxes
those who benefit from what the tax pays for should be the one who pays the tax
-ex.) gasoline, transportation, etc.
sumptuary tax
, meant to change peoples behavior, is designed to effect goods that have negative externalities,
this tax cures DWL and generates gov. revenue (sin taxes)
-ex.) alcohol, tobacco, tanning
producer surplus
-difference between what we would have sold for and what we actually sold for
-is the area above the supply curve and below the market price
consumer surplus
-difference between what we're willing to pay for a good and what you would actually pay
-is the area below demand and above the market price
structural deficit
-something that is happening that was/is caused by govt. action
-we built the deficit this way
(when things are average and there is still a deficit this is a structural deficit)
cyclically adjusted budget deficit
smoothed out to adjust to the ups and downs of the economy
-if theres still a deficit when we look at costs when everything is average, then theres a problem
cyclical budget deficit
-deficit in response to something that could be controlled
-response to the economy
-economy depends on spending
-when theres a recession we naturally have more of a deficit
Answers
tax base
-deals with what the tax is being imposed on
-ex.) income, payroll, consumption, sales, etc.
tax
a mandatory payment to the gov. for which no product or service is received
collectability
-how easy it is to collect a tax
-its easier to pay taxes when its easy to figure out
DWL when dealing with economic impacts
-taxes create DWL
-DWL grows with the square of the tax rate
Regulatory and Environmental taxes
deals with pollution and ozone depleting taxes, aims to reduce use of goods with negative
externalities
benefit based taxes
those who benefit from what the tax pays for should be the one who pays the tax
-ex.) gasoline, transportation, etc.
sumptuary tax
, meant to change peoples behavior, is designed to effect goods that have negative externalities,
this tax cures DWL and generates gov. revenue (sin taxes)
-ex.) alcohol, tobacco, tanning
producer surplus
-difference between what we would have sold for and what we actually sold for
-is the area above the supply curve and below the market price
consumer surplus
-difference between what we're willing to pay for a good and what you would actually pay
-is the area below demand and above the market price
structural deficit
-something that is happening that was/is caused by govt. action
-we built the deficit this way
(when things are average and there is still a deficit this is a structural deficit)
cyclically adjusted budget deficit
smoothed out to adjust to the ups and downs of the economy
-if theres still a deficit when we look at costs when everything is average, then theres a problem
cyclical budget deficit
-deficit in response to something that could be controlled
-response to the economy
-economy depends on spending
-when theres a recession we naturally have more of a deficit
