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19 Cards in this Set
- Front
- Back
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The average propensity to save/consume is...
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how much you save out of average income
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the marginal propensity to save/consume is...
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how much you save out of bonuses
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what is the multiplier effect
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total funds generated by a set sum inserted into the economy
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indicates total funds generated by a set sum inserted into the economy
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multiplier effect
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when does savings leakage not affect GDP
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when savings = gross investment
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equilibrium GDP
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when GDP = consumption + gross investment
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when you have an unplanned increase in inventory...
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GDP goes down
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when you have an unplanned decrease in inventory...
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GDP goes up
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what tools are used for fiscal policy (2)
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spending and taxes
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who handles fiscal policy
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federal government
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during expansionary policy you want to...
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heat the economy up
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during contractionary policy you want to...
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cool the economy down
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under the contractionary policy how do you cool the economy down
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-reduce spending
-increase taxes |
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under the expansionary policy how do you heat the economy up
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-increase spending
-decrease taxes |
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what does budget deficit mean
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in that fiscal year you spent more than came in
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what does national public debt mean
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how much the government owes
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list the 3 problems of timing and explain one
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-recognition
-operational -administration (takes time for them to come up with a plan) |
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what is the primary burden of public debt
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interest
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debt ownership (who holds our debt)
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-pension funds
-foreign countries |
