Chapter 8 Key Term Review

What is "Gross Income"?

• The amount a person earns after taxes and deductions

• The amount you earn before taxes and other payroll deductions

• The total amount of debt a country owes

• Taxes paid by anyone who owns property

What is "Net Income"?

• The amount you earn before taxes and other payroll deductions

• The total tax a person or business has to pay

• The amount a person earns after payroll taxes and other deductions

• The smallest amount that employers can legally pay their employees per hour of work

What does "Fiscal Year" refer to?

• A one-year period that governments or companies use for financial reporting

• The amount of money earned from an investment sold at a higher price than you paid for it

• The total amount of debt a country owes to companies and other countries

• A tax return that a taxpayer submits annually to the government

What is "Deficit Spending"?

• Spending less than you earn

• The total amount of debt a country owes

• Spending more than you earn, funded by borrowing rather than by taxation

• The dollar amount people can subtract from their income before tax is calculated

What is "National Debt"?

• The amount a person earns after payroll taxes and other deductions

• The total amount of debt a country owes to companies and other countries as a result of deficit spending

• The smallest amount that employers can legally pay their employees per hour of work

• The amount of money a taxpayer can subtract from the taxes they owe

What is "Earned Income"?

• Any income that is generated by the work someone performs

• Money earned from an investment sold at a higher price than you paid for it

• Taxes paid by anyone who earns an income

• The total amount of debt a country owes

What is the difference between "Estate Tax" and "Inheritance Tax"?

• Estate Tax is based on the market value of owned assets, while Inheritance Tax is a state tax on an asset received from someone who has passed away

• Inheritance Tax is a tax on the market value of owned assets, while Estate Tax is a state tax on an asset received from someone who has passed away

• Estate Tax is a tax on an asset that exceeds the yearly amount you can transfer to another person without compensation of equal value, while Inheritance Tax is not

• There is no difference; they are the same thing

What is Sales Tax?

• A tax on the sale of property

• A tax on goods and services that goes to a state or local government

• A tax on income earned from sales

• A tax on imported goods

What is Excise Tax commonly referred to as?

• Income tax

• Luxury tax

• Corporate tax

• Property tax