- Fiscal Policy
- Government decisions about spending and taxation that are used to influence economic output, employment, prices, and overall demand.
- Government Spending
- Money the government uses to buy goods and services, fund programs, hire workers, make transfers, or respond to economic crises.
- Taxation
- The process by which governments collect revenue from households, businesses, transactions, property, imports, pollution, or wealth.
- Income Tax
- A tax on wages, salaries, business income, investment income, or other earnings received by people or organizations.
- Corporate Tax
- A tax on business profits that can affect how much firms keep for investment, hiring, expansion, or distribution to owners.
- Sales Tax
- A consumption tax added to the price of goods or services at the point of purchase.
- Property Tax
- A tax based on the assessed value of land, buildings, homes, or other taxable property.
- Value-Added Tax (VAT)
- A tax collected on the value added at each stage of producing and selling a good or service.
- Excise Tax
- A tax on producing, selling, or using a specific good or activity, sometimes used to raise revenue or discourage consumption.
- Pollution Tax
- A tax on emissions or environmentally harmful activity intended to make polluters account for social costs.
- Tariff
- A tax on imported goods that raises the cost of foreign products and can affect trade, consumers, and producers.
- Wealth Tax
- A tax based on the total value of assets a person owns, rather than only on income earned during a year.
- Effective Tax Rate
- The share of income actually paid in taxes, calculated by dividing taxes paid by income.
- Progressive Tax
- A tax that takes a larger share of income as income rises, so higher-income households pay a higher effective rate.
- Proportional Tax
- A tax that takes the same share of income at every income level, often called a flat tax.
- Regressive Tax
- A tax that takes a larger share of income from lower-income households than from higher-income households.
- Expansionary Fiscal Policy
- Fiscal policy that increases government spending, lowers taxes, or both to raise demand, output, and employment in the short run.
- Contractionary Fiscal Policy
- Fiscal policy that lowers government spending, raises taxes, or both to cool inflationary pressure and slow demand.
- Balanced Budget
- A budget outcome where government revenue equals government spending for a given year.
- Budget Deficit
- A budget outcome where government spending is greater than revenue, requiring borrowing to cover the shortfall.
- Budget Surplus
- A budget outcome where government revenue is greater than spending, allowing the government to reduce borrowing or pay down debt.
- Treasury Securities
- Debt instruments such as Treasury bills, notes, and bonds that the federal government sells to borrow money from investors.
- Treasury Bills
- Short-term Treasury securities used by the federal government to borrow money for periods of one year or less.
- Treasury Notes
- Medium-term Treasury securities used by the federal government to borrow money for periods longer than bills but shorter than long-term bonds.
- Treasury Bonds
- Long-term Treasury securities used by the federal government to borrow money and pay investors interest over many years.
- National Debt
- The accumulated total of past government deficits and surpluses, representing how much the government owes over time.
