The equilibrium level of national income is the output level at which aggregate demand (total planned spending) equals
Glossary Category: Economics
expansionary fiscal policy
Expansionary fiscal policy involves increasing government spending and/or cutting taxes to stimulate economic growth. Its primary goal is
contractionary fiscal policy
Contractionary fiscal policy involves measures to slow economic activity and combat inflation, primarily through reducing government spending and/or
government spending
Government spending refers to expenditure by the government on the purchase of goods and services using public funds.
proportional tax system
A proportional tax system, also known as a flat tax, requires all individuals to pay the same fixed
regressive tax system
A regressive tax system is one in which the average tax rate falls as an individual’s income rises,
progressive tax system
A progressive tax system is one in which the average tax rate rises with income, so higher-income individuals
indirect taxes
Indirect taxes are levies imposed on the production, purchase, or consumption of goods and services, rather than directly
direct taxes
Direct taxes are levies imposed directly on individuals and organizations according to their income, wealth, or property. Examples
double coincidence of wants
The double coincidence of wants refers to a situation in a barter economy where both trading parties simultaneously