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4 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Fiscal policy?
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Area of economic policy.
-Concerned w/ 1. govt. purchases 2. taxes 3. transfer payments |
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Net Taxes
How does the change in net taxes combat contraction? |
Tax revenues (collected by govt.) MINUS transfer payments (made by govt. to individuals)
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cut in next taxes (like increase in govt. purchases) touches off expansionary multiplier process.
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Discretionary Fiscal Policy
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Changes in the laws regarding govt. purchases & net taxes.
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Many tax & spending laws are written in such a way that levels of fiscal policy variables change automatically as economic conditions vary.
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Automatic Fiscal Policy
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Changes in govt. purchases/net taxes taht are caused by changes in economic conditions given unchanged tax spending laws.
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