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BENEFIT PRINCIPLE: A principle of taxation in which taxes are based on the benefits received by people using the good financed with the tax. The benefit principle is often difficult to implement because by their very nature, many government produced goods (public goods) do not have easily measured benefits. But in those cases where benefits are identifiable, government is not shy about establishing taxes, fees, or charges in accordance with the benefit principle. Public college tuition, national park admission fees, and gasoline excise taxes are three common examples. The beneficiaries of education, a wilderness experience, and highway use are asked (required) to pay accordingly.
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Lesson 10: Gross Domestic Product | Unit 3: Two Views of GDP
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Page: 15 of 25
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The four sectors of the economy buy ALL current economic production and when aggregated give us GDP. The four sectors and their expenditures: - Household: Consumption (C).
- Business: Investment (I).
- Government: Government Expenditures (G).
- Foreign: Net Exports (X-M), the difference between Exports (X) and Imports (I).
Expenditures on GDP: GDP = C + I + G + (X-M)- C, I and G buy not just domestic goods and services, but also imports.
- When we aggregate C, I, G and X we have domestic production plus imports. To measure only domestic production, we subtract imports (M).
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GOVERNMENT BORROWING The acquisition of funds through the financial markets by the government sector which are used to finance government expenditures. In terms of the simple circular flow model, this is one of two basic demands for household saving diverted into financial markets. The other is investment borrowing. Government borrowing is also one of two methods of financing government expenditures. The other is taxes.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius wanting to buy either decorative picture frames or storage boxes for your income tax returns. Be on the lookout for neighborhood pets, especially belligerent parrots.
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This isn't me! What am I?
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Sixty percent of big-firm executives said the cover letter is as important or more important than the resume itself when you're looking for a new job
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"To sit back and let fate play its hand out, and never influence it, is not the way man was meant to operate." -- John Glenn, astronaut, U.S. senator
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U
Unemployment
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