MACRO - CHAPTER 8 .txt

Changes in government purchases, taxes and transfer to achieve macroeconomic outcomes of steady growth, full employment and stable prices

Spending in circular flow that does not start with consumers instead starts with government, exports and business spending

spending that leaks out of circular flow through taxes, savings and imports

Spending injection has multiplied impact on real GDP

recessionary gap

benefits that affect others external to a choice or trade

costs that affect other external to a choice or trade

the incentive effect of taxes on aggregate supply

Revenues = Expenses

revenues are less then expenses

revenues are more then expenses

tax and transfer adjustments that counteract change to real GDP without explicit government decisions

created only as a result of automatic stabilizers counteracting business cycles

also known as surpluses are flows amount per unit of time, usually measured per year

is a stock fixed amount in a moment in time

Total amount owed by government

tendency for government debt financial fiscal policy to decrease private investment spending by raising interest rates

Tendency for government debt financed fiscal policy to increase private investment spending by improving expectations