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Micro Ch 15
Stack based on Chapter 15 of Principles of Microeconomics 3e
| Term | Definition |
|---|---|
| earned income tax credit (EITC) | a method of assisting the working poor through the tax system |
| effective income tax | percentage of total taxes paid divided by total income |
| estate tax | a tax imposed on the value of an inheritance |
| income inequality | when one group receives a disproportionate share of total income or wealth than others |
| Lorenz curve | a graph that compares the cumulative income actually received to a perfectly equal distribution of income; it shows the share of population on the horizontal axis and the cumulative percentage of total income received on the vertical axis |
| poverty | the situation of being below a certain level of income one needs for a basic standard of living |
| poverty line | the specific amount of income one requires for a basic standard of living |
| poverty rate | percentage of the population living below the poverty line |
| poverty trap | antipoverty programs set up so that government benefits decline substantially as people earn more income—as a result, working provides little financial gain |
| progressive tax system | a tax system in which the rich pay a higher percentage of their income in taxes, rather than a higher absolute amount |
| quintile | dividing a group into fifths, a method economists often use to look at distribution of income |
| redistribution | taking income from those with higher incomes and providing income to those with lower incomes |
| safety net | the group of government programs that provide assistance to people at or near the poverty line |
Created by:
CheriseSLCC
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