Terms : Hide Images
| 248799825 | Fiscal Policy | changes in government spending and tax collections designed to achieve full-employment and noninflationary domestic output | |
| 248799826 | Employment Act of 1946 | federal legislation that committed the Federal government to the maintenance of economic stability(a high level of employment, a stable price level, and economic growth) | |
| 248799827 | Council of Economic Advisers (CEA) | a group of three persons that advises and assist he president of the United States on economic matters | |
| 248799828 | 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 | |
| 248799829 | budget deficit | the amount by which the expenditures of the federal government exceed its revenues in any year | |
| 248799830 | contractionary fiscal policy | a decrease in government purchases for goods and services, an increase in net taxes, or some combination of the two, for the purpose of decreasing aggregate demand and thus controlling inflation | |
| 248799831 | budget surplus | the amount by which the revenues of the federal government exceed its expenditures in any year | |
| 248799832 | built-in stabilizer | a mechanism that increases government's budget deficit (or reduces its surplus) during a recession and increases governments budget surplus (or reduces its deficit) during inflation without any action by policy makers. Tax system is one of these mechanisms | |
| 248799833 | progressive tax system | average tax rate = tax revenue/GDP and rises with GDP | |
| 248799834 | proportional tax system | average tax rate remains constant as GDP rises | |
| 248799835 | regressive tax system | tax rate falls as GDP rises | |
| 248799836 | full-employment budget | comparison of the government expenditures and tax collections that would occur if the economy operated at full employment throughout the year | |
| 248799837 | cyclical deficit | federal budget deficit that is caused by a recession and the consequent decline in tax revenues | |
| 248799838 | political business cycle | the alleged tendency of congress to destabilize the economy by reducing taxes and increasing government expenditures before elections and to raise taxes and lower expenditures after elections | |
| 248799839 | crowding-out effect | a rise in interest rates and a resulting decrease in planned investment caused by the federal governments increased borrowing in the money market | |
| 248799840 | net export effect | the idea that the impact of a change in monetary policy or fiscal policy will be strengthened or weakened by the consequent change in net exports. the change in net exports occurs because of changes in real interest rates, which affect exchange rates | |
| 248799841 | supply-side fiscal policy | contends tax reductions will shift aggregate supply curve to the right, negating the inflation and increasing economic growth |
