The flashcards below were created by user abjones.92 on FreezingBlue Flashcards.

  1. Fiscal Policy
    Changes in government purchases, taxes and transfer to achieve macroeconomic outcomes of steady growth, full employment and stable prices
  2. Injection
    Spending in circular flow that does not start with consumers instead starts with government, exports and business spending
  3. Leakage
    spending that leaks out of circular flow through taxes, savings and imports
  4. Multiplier effect
    Spending injection has multiplied impact on real GDP
  5. Fiscal policies to increase government spending are used in
    recessionary gap
  6. Positive externalities
    benefits that affect others external to a choice or trade
  7. Negative externalities
    costs that affect other external to a choice or trade
  8. Supply-side effect
    the incentive effect of taxes on aggregate supply
  9. Balanced budget
    Revenues = Expenses
  10. Budget deficit
    revenues are less then expenses
  11. Budget surplus
    revenues are more then expenses
  12. Automatic stabilizer
    tax and transfer adjustments that counteract change to real GDP without explicit government decisions
  13. Cyclical deflects and surpluses
    created only as a result of automatic stabilizers counteracting business cycles
  14. Deficits
    also known as surpluses are flows amount per unit of time, usually measured per year
  15. Debit
    is a stock fixed amount in a moment in time
  16. National Debt
    Total amount owed by government
  17. Crowding out
    tendency for government debt financial fiscal policy to decrease private investment spending by raising interest rates
  18. Crowding in
    Tendency for government debt financed fiscal policy to increase private investment spending by improving expectations
Card Set
Show Answers