Terms : Hide Images
| 247211212 | Automatic stabilizers | changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action | |
| 247211213 | Discretionary fiscal policy | the deliberate manipulation of government purchases, taxation, and transfer payments to promote macroeconomic goals, such as full employment, price stability, and economic growth | |
| 247211214 | Simple tax multiplier | the ratio of a change in real GDP demanded to the initial change in autonomous net taxes that brought it about; the numerical value of the simple tax multiplier is -MPC/(1-MPC) | |
| 247211215 | Expansionary fiscal policy | An increase in government purchases of goods and services, a decrease in net taxes, or some combination of the two for the purpose of increasing aggregate demand and expanding real output | |
| 247211216 | Contrationary fiscal policy | to fight inflations, decrease government purchases or raise taxes. causes AD curve to shift to left, reducing real GDP and price level. | |
| 247211217 | Classical economists | a group of 18th and 19th century economists who believed that economic downturns were short-run phenomena that corrected themselves through natural market forces; thus, they believed the economy was self-correcting and needed no government intervention | |
| 247211218 | Employment Act of 1946 | law that assigned to the federal government the responsibility for promoting full employment and price stability | |
| 247211219 | Permanent income | income that individuals expect to receive on average over the long term | |
| 247211220 | American Recovery and Reinvestment Act | enacted feb 2009, $787 mil in government spending to attempt to revive the economy |
