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Questions and Answers
What is a progressive tax?
What is a progressive tax?
Public debt refers to the total money a government is owed.
Public debt refers to the total money a government is owed.
True
What are public goods?
What are public goods?
Goods or services that are non-excludable and non-rivalrous, often provided by the government.
A budget is a financial plan outlining projected government's __________ and __________ for a specific period.
A budget is a financial plan outlining projected government's __________ and __________ for a specific period.
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Which of the following is NOT a core public finance concept?
Which of the following is NOT a core public finance concept?
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Transfer payments redistribute income through methods such as taxation.
Transfer payments redistribute income through methods such as taxation.
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Match the following terms with their definitions:
Match the following terms with their definitions:
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__________ is the burden of a tax that is actually borne by an individual or group.
__________ is the burden of a tax that is actually borne by an individual or group.
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Study Notes
Core Public Finance Concepts
- Public finance involves government revenue and expenditure, essential for informed citizenship and policy discussions.
- Revenue: Income from taxes (income, corporate, sales, property), fees, licenses, and other sources.
- Expenditure: Government spending on public services including education, healthcare, infrastructure, defense, and social welfare programs.
- Budget: A financial plan projecting government revenue and expenditure for a specific period.
- Fiscal Policy: Government strategies concerning spending and taxation aimed at influencing economic conditions.
- Public Debt: The total amount of money owed by the government.
Specific Public Finance Terms
- Tax Incidence: Refers to who ultimately bears the burden of a tax, whether it be consumers or producers.
- Progressive Tax: A tax system where the tax rate increases as the individual’s income rises.
- Regressive Tax: A tax system where the tax rate decreases as income increases, disproportionately affecting lower-income earners.
- Proportional Tax: A tax structure maintaining a constant tax rate regardless of income level.
- Transfer Payments: Government expenditures that redistribute income, such as social security, unemployment benefits, and welfare programs.
- Public Goods: Services that are non-excludable and non-rivalrous, typically provided by the government, like national defense and public parks.
- Externalities: Costs or benefits affecting third parties not directly involved in a transaction, which can impact economic efficiency.
- Fiscal Federalism: The allocation of financial responsibilities and powers among federal, state, and local governments.
Broader Economic Terms Related to Public Finance
- Gross Domestic Product (GDP): The total monetary value of all finished goods and services produced within a country's borders in a specific time frame.
- Inflation: A rise in the general price levels of goods and services in an economy over time, diminishing purchasing power.
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Description
This quiz covers essential terminology and concepts related to public finance, including revenue and expenditure. Understanding these terms is crucial for engaging in informed discussions about government policies and fiscal matters. Test your knowledge and enhance your public finance literacy with this quiz.
