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an imposed tax by any level of government on any individual or entity (ex. income tax, wealth tax, property tax)
imposed taxes on goods and commodities (ex. sales tax)
What are the two ways that taxes are involved in public policy?
- Raising revenue to run the government
If someone has more wealth than others, than they have the ability to pay more taxes. This is the equity of differing classes of people or ________.
This kind of equity is defined amongst similar people on the same income bracket
Explain the changes in Income Effect.
Prices are NOT changing, ONLY INCOME has changed
Explain the changes in Substitution Effect.
- Price increases, and consumption decreases
- (-) Negative for ALL TYPES OF GOODS
What is the most important rule of the Price Effect?
Price increase will sometimes increase consumption, or decrease consumption DEPENDING ON THE NATURE OF THE GOOD.
How do inferior goods affect the income effect?
If income decreases, good consumption of that inferior good increases
What are the five major types of taxation?
- Taxes on EarningsTaxes on Individual Income
- Taxes on Corporate IncomeTaxes on Wealth
- Taxes on Consumption
In the case of insurance, what is a deductible?
the money you pay out of pocket before your insurer can cover the rest
What is a copayment?
A payment made at the time a service is provided and before insurers provide any assistance