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9 Cards in this Set

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Deliberate changes in government spending and tax collections designed to achieve full employment, control inflation, and encourage economic growth
Fiscal policy
Changes in government spending and taxes that are at the option of the Federal Government
Discretionary Fiscal Policy
Changes in fiscal policy that occur without congressional action.
Automatic Fiscal Policy
Government spending up and/or taxes down
Expansionary fiscal policy
Government spending down and or taxes up
Contractionary fiscal policy
The time between the beginning of recession or inflation and the certain awareness that it is actually happening
Recognition lag
The lag between the time the need for fiscal action is recognized and the time action is taken.
Administrative lag
The lag between the time fiscal action is taken and the time that action affects output, employment, or the price level.
Operational lag
Expansionary fiscal policy may increase interest rate and reduce investment spending, thereby weakening or canceling the stimulus of the expansionary policy
Crowding-out effect