government incentives Flashcards
(9 cards)
1
Q
incentives definition
A
a benefit or rewards or cost that motivates economic agents to make decisions or act in a particular way.
2
Q
features of incentives
A
positive - encourages
negative- discourages
may involve financial rewards or penalties or non-financial in nature.
3
Q
Disincentives
A
- direct taxes
- indirect taxes
- regulations/laws
4
Q
Incentives
A
- subsidies
- tax rebate/offsets
5
Q
Direct taxes
A
- tax on income –> contributes to government revenue.
6
Q
Indirect taxes
A
- taxes on producers (making it hard to consume) - production is costly
- negative externalities in consumption
7
Q
Regulations
A
fines which stop consumers from breaking regulations (or even jail time)
8
Q
Subsidies
A
Expenditure (giving money for child care)
- external benefits
9
Q
Tax rebate/offsets
A
Taxes return or reducing amount of tax to pay (spending power)
