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12 Cards in this Set
- Front
- Back
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Expansionary fiscal policy
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increases the ag. Demand to counteract a recessionary gap
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Contractionary fiscal policy
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decreases in the ag. Demand to counteract a inflationary gap.
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Lump- sum tax
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each household/ agent gets taxed the same
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Proportional tax
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tax increases when the real gdp increases and decreases when the real gdp decreases
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Automatic stabilizers
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gov spending and taxation rules that cause fiscal policy to be expansionary when the economy contracts and contractionary when it expands.
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Discretionary fiscal policy
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involves deliberate action post change rather that a pre setting of rules.
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Cyclically adjusted budget balance
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a budget balance that discounts the effects of automatic stabilizers on budget. If real GDP were equal to potential output.
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Fiscal year
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October to September
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Public Debt
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government debt held by individuals or institutions outside government.
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Crowding out
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the negative impact of large scale borrowing of governments on other firms ability to borrow.
Debt- GDP ratio- g |
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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 that are effectively debts, though are not counted in usual debt statistics.
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