4 indirect business taxes a a tax paid by someone

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4. Indirect business taxes: a. A tax paid by someone other than the one who it is levied. b. If a company’s taxes go up, they raise their prices, passing on their tax increases to the consumer. 5. Transfer payments:
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a. Social security benefits, Medicare and Medicaid benefits, unemployment benefits, and other cash benefits. 6. From nominal GDP to real GDP per capita: a. Real GDP : the value of final goods and services produced in a given year expressed in terms of the prices in a reference base year. b. Nominal GDP : the value of final goods and services produced in a given year expressed in terms of the prices of that same year. 7. Phases of the business cycle: a. Expansion b. Recession b.i. Two turning points: b.i.1. Peak b.i.2. Trough 8. Definition of Recession: a. Recession is a period during which real GDP decreases (growth rate is negative) for at least two successive quarters. Practice/Homework Questions: 1. What are indirect business taxes? a. Taxes such as sales and other excise taxes that firms collect but that are not regarded as a part of firms’ incomes 2. What are transfer payments? a. Payments made in which no good/service is being paid for; typically this is a payment made by the Federal government to citizens through various social benefit programs 3. What are the components of GDP?
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  • Fall '08
  • Macroeconomics, Gdp, gross domestic product, government spending, Total Production and Income, a. Net GDP

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