Term
| Functional Distribution of Income |
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Definition
| The manner in which national income is divided among the functions performed to earn it (or the kinds of resources provided to earn it); the division of national income into wages and salaries, proprietors' income, corporate profits, interest, and rent. |
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Term
| Personal Distribution of Income |
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Definition
| The manner in which the economy's persoanl or disposable income is divided among different income classes or different households or families. |
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Term
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| A consumer good with an expected life (use) of three or more years. |
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| A consumer good with an expected life (use) of less than three years. |
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Definition
| An (intangible) act or use for which a consumer, firm, or government is willing to pay. |
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| A physical establishment that performs one or more functions in the production, fabrication, and distribution of goods and services. |
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| An organization that employs resources to produce a good or service for profit and owns and operates one or more plants. |
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| A group of (one or more) firms that produce identical or similar products. |
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| An unincorporated firm owned and operated by one person. |
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Definition
| An unincorporated firm owned and operated by two or more persons. |
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| A legal entity ("person") chartered by a state or the Federal Government that is distinct and separate from the individuals who own it. |
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Definition
| An ownership share in a corporation. |
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Definition
| A financial device through which a borrower is obligated to pay the principal and interest on a loan at a specific date in the future. |
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Definition
| Restriction o fthe maximum loss to a predetermined amount for the owners of a corporation. The maximum loss is the amount they paid for their shares of stock. |
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Definition
| A conflict of interest that occurs when agents pursue their own objectives to the detriment of the stockholders' goals. |
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Term
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Definition
| A market structure in which the number of sellers is so small that each seller is able to influence the total supply and the price of the good or service. |
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Definition
| A cost or benefit from production or consumption, accruing without compensation to someone other than the buyers and sellers of the product. |
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Definition
| A cost imposed without compensation on third parties by the production or sonsumption of sellers or buyers. Example: A manufacturer dumps toxic chemicals into a river, killing the fish sought by sports fishers; an external cost or a spillover cost. |
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Definition
| A benefit obtained without compensation by third parties from teh production or consumption of sellers or buyers. Example: A beekeeper benefits when a neighboring farmer plants clover. An external benefit or a spillover benefit. |
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| A good or service that is characterized by nonrivalry and nonexcludability; a good or service with these characteristics provided by government. |
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Definition
| The inability of potential providers of an economically desirable good or service to obtain payment from those who benefit, because of nonexcludability. |
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Definition
| A good or service to which excludability could apply but that has such a large positive externality that government sponsors its production to prevent an underallocation of resources. |
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Definition
| Expenditures by government for goods and services that government consumes in providing public goods and for public capital that has a long lifetime; the expenditures of all governments in the economy for those final goods and services. |
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Definition
| A payment of money by a government to a household or firm for which the payer receives no good or service directly in return. |
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Definition
| A tax levied on the taxable income of individuals, households, and unincorporated firms. |
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Definition
| The tax rate paid on each additional dollar of income. |
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Definition
| Total tax paid divided by total (taxable) income, as a percentage. |
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Term
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Definition
| A tax levied on employers of labor equal to a percentage of all or part of the wages and salaries paid by them and on employees equal to a percentage of all or part of the wages and salaries received by them. |
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Term
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Definition
| A tax levied on the net income (accounting profit) of corporations. |
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Definition
| A tax levied on the production of a specific product or on the quantity of the product purchased. |
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Definition
| A tax on the value of property owned by firms and households. |
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Term
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Definition
| A tax levied on the cost of a broad group of products. |
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