Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

4 Cards in this Set

  • Front
  • Back
  • 3rd side (hint)
Fiscal policy?
Area of economic policy.
-Concerned w/
1. govt. purchases
2. taxes
3. transfer payments
Net Taxes

How does the change in net taxes combat contraction?
Tax revenues (collected by govt.) MINUS transfer payments (made by govt. to individuals)
cut in next taxes (like increase in govt. purchases) touches off expansionary multiplier process.
Discretionary Fiscal Policy
Changes in the laws regarding govt. purchases & net taxes.
Many tax & spending laws are written in such a way that levels of fiscal policy variables change automatically as economic conditions vary.
Automatic Fiscal Policy
Changes in govt. purchases/net taxes taht are caused by changes in economic conditions given unchanged tax spending laws.