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January 17, 2018 

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LONG-RUN TREND: The general movement over time of particular measurement, especially one prone toward shorter term fluctuations. One of the most important long-run trends in the study of macroeconomics is for real GDP. The long-run trend of real GDP, which has historically increased about 3% a year, indicates the increase in the economy's production capabilities. Such capabilities have increased due to increases in the quantity and quality of resources.

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AVERAGE TAX RATE: A tax rate that is the percentage of the total tax base paid in taxes. Comparable to any average, this is the total taxes collected or paid divided by the total value of the tax base. For example, if a person earns $50,000 in income and pays $5,000 in taxes, then the average income tax rate is 10 percent. The contrasting term is marginal tax rate.

     See also | marginal tax rate | tax rate | tax base | tax incidence | tax proportionality | proportional tax | progressive tax | regressive tax | average-marginal rule |


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SCARCITY

A pervasive condition of human existence that results because society has unlimited wants and needs, but limited resources used for their satisfaction. This fundamental condition is the common thread that binds all of the topics studied in economics.

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