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ABILITY-TO-PAY PRINCIPLE: A principle of taxation in which taxes are based on the income or resource-ownership ability of people to pay the tax. The income tax collected by our friends at the Internal Revenue Service is one of the most common taxes that seeks to abide by the ability-to-pay principle. In theory, the income tax system is set up such that people with greater incomes pay more taxes. Proportional and progressive taxes follow this ability-to-pay principle, while regressive taxes, such as sales taxes and Social Security taxes, don't.
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DERIVATION, CONSUMPTION LINE: A consumption line, a graphical depiction of the relation between household sector consumption and income, can be derived from a simple consumption schedule, a table or chart showing the relation between household sector consumption and income. This is easily accomplished by plotting the consumption-income pairs from the schedule as points in a diagram that measures consumption on the vertical axis and income on the horizontal axis, then connection the points with a line. The consumption line can also be derived directly by plotting the consumption function using slope and intercept values. See also | consumption schedule | consumption line | consumption function | induced consumption | autonomous consumption | average propensity to consume | marginal propensity to consume | saving line | derivation, saving line | slope, consumption line | intercept, consumption line | effective demand | psychological law | consumption | consumption expenditures | Keynesian economics | macroeconomics | household sector | disposable income | national income | personal consumption expenditures | induced expenditures | autonomous expenditures | aggregate expenditures | derivation, aggregate expenditures line | aggregate expenditures line | consumption expenditures determinants | Keynesian model | Keynesian equilibrium | injections-leakages model | aggregate demand | paradox of thrift | fiscal policy | multiplier |
Recommended Citation:DERIVATION, CONSUMPTION LINE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: September 7, 2024].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: derivation, consumption line
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SERVICES, CONSUMPTION Personal consumption expenditures on activities that provide direct satisfaction of wants and needs without the production of tangible goods. Common examples are information, entertainment, and education. This is one of three categories of personal consumption expenditures in the National Income and Product Accounts maintained by the Bureau of Economic Analysis. The other two are durable goods and nondurable goods. Services are about 60 percent of personal consumption expenditures and 40 percent of gross domestic product.
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GRAY SKITTERY
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Today, you are likely to spend a great deal of time watching infomercials hoping to buy either a stretchable, flexible watch band or high-gloss photo paper that works with your printer. Be on the lookout for fairy dust that tastes like salt.
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"In a time of drastic change, it is the learners who inherit the future. " -- Eric Hoffer, philosopher
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VAR
Vector Autoregression
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