Flashcards in Unit 3 Test: Taxes, Federal Spending and Economic Performance Deck (77)
Who is included in the labor force?
Defined as non-institutionalized individuals aged 16+ who are either working or are unemployed and actively seeking work.
- Includes underemployed and discouraged workers. `
How is the labor force participation rate and unemployment rate calculated?
LFPR = Labor Force / Population x 100
UR = Unemployed / Labor Force x 100
Who is most negatively affected by unemployment?
Minorities. Blacks, asians, and teenagers.
What are the 4 type of unemployment?
What is frictional unemployment?
Temporarily between jobs or just entering the job market.
What is structural unemployment?
When someone's skills are no longer needed or aligned with the needs of the economy.
What is cyclical unemployment?
When the demand for goods and services falls (recessions).
What is seasonal unemployment?
Employment based on seasonal changes.
What is the BLS?
Bureo of Labor Statistics
- reports the "economic situation" every first Friday of the month
What is a discouraged worker?
Those who have given up on their job search because they believe no jobs were available for them.
What is underemployed?
Have taken part-time work but prefer full time work or have taken a job for which they are overqualified
What is full employment?
If we have only the natural rate of unemployment (no cyclical).
What is natural rate of unemployment?
Unavoidable unemployment of frictional and structural.
"Marginally attached to the labor force" means...
Were able to and wanted to work and had looked for a job in the past 12 months but had since stopped looking for last 4 four weeks.
"Part time for economic reasons" means...
These individuals are working part time because their hours were cut or they could not find full time work.
What are the criticisms of underemployment rate?
It can misdiagnose the actual unemployment rate.
- Ignores discouraged job seekers, part time workers, race/age inequalities, and illegal labor.
How are income taxes calculated?
??? Income brackets?
What are the three tax structures?
What is proportional tax?
A tax for which the % of income paid in taxes remains the same for all income levels.
What is progressive tax?
A tax for which the % of income paid in taxes increases as income increases.
- ex. federal income tax
What is regressive tax?
A tax for which the % of income paid in taxes decreases as the income increases.
What are the characteristics of a good tax?
1) Simplicity (easily understood)
2) Efficiency (collect/pay)
3) Certainty (clear of what to do)
4) Equity (fair)
What is the benefits-recieved principle?
People should pay taxes based on the levels of benefits he/she expects to receive.
What is ability-to-pay principle?
People should pay taxes according to their ability to pay.
- idea behind progressive income tax
What is a tax?
A required payment to a local, state, or national government that allows for finances needed to operate government.
What is revenue?
Income received by a government from taxes and non-tax sources.
What is a tax base?
Income, property, good, or service that is subject to a tax.
Who bears the tax burden/incidence of a tax (final burden)?
In inelastic demand, the consumers. In elastic demand, the sellers.
What is Federal Insurance Contributions Act (FICA)?
Taxes that fund social security and medicare.
- payments are shared by employees and employers.