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14 Cards in this Set
- Front
- Back
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Social Insurance
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government program intended to protect families against economic hardship.
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Expansionary fiscal policy
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increases aggregate demand.
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Contractionary fiscal policy
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reduces aggregate demand.
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Automatic Stablizers
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government spending and taxation rules that cause fiscal policy to be expansionary when the economy contracts and contractionary when the economy expands.
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Discretionary fiscal policy
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fiscal policy that is the result of deliberate actions by policy makers rather than rules.
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Cyclically adjusted budget balance
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an estimate of what the budget balance would be if real GDP were exactly equal to potential output.
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Fiscal years
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run from October 1 to September 30 and are named by the calendar year in which they end.
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Public debt
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government debt held by individuals and institutions outside the government.
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debt-GDP ratio
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government debt as a percentage of GDP.
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Implicit liabilities
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spending promises made by governments that are effectively a debt despite the fact that they are not included in the usual debt statistics.
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US government spending on transfer payments is accounted by for three big programs:
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Social security, medicare, medicaid.
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Federal level taxes are collected in the form of:
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income tax.
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State and local level collect taxes in the form of:
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mix of sales taxes, property taxes, income taxes, and various fees.
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Increase in taxes or decrease in government transfers...
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reduces disposable income.
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