Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

18 Cards in this Set

  • Front
  • Back
Revenue and expenditure items in the federal budget that automatically change with the state of the economy in such a way as to stabilize GDP
Automatic Stabilizers
The Ratio of Change in the equilibrium level of output to a change in government spending where the change in government spending is balanced by a change in taxes so as not to create any deficit
Balanced-budget multiplier
The difference between what a government spends and what it collects in taxes in a given period G-T
Budget Deficit
The deficit that occurs because of a down turn in the business cycle
Cyclical Deficit
Changes in taxes or spending that are the result of deliberate changes in government policy
Discretionary fiscal policy
Total income minus net taxes Y-T
Disposable, or after-tax income (Yd)
The Budget of the federal government
Federal Budget
The total amount owed by the federal government
Federal Debt
Federal government receipts minus expenditures
Federal Surplus(+) or deficit(-)
The negative effect on the economy that occurs when average tax payers have moved into higher income brackets during an expansion
Fiscal drag
The governments spending and taxing policies
Fiscal policy
What the federal budget would be if the economy were producing at a full employment level of output
Full employment budget
The ratio of the change in the equilibrium level of output to a change in government spending
Government spending multiplier
The behavior of the Federal Reserve concerning the nation's money supply
Monetary Policy
Taxes paid by firms and households to the government minus transfer payments made to households by the government
Net Taxes (T)
The privately held (non-government-owned) debt of the U.S. governemnt
Private held federal debt
The deficit that remains at full empolyment
Structural Deficit
The ratio of change in the equilibrium level of output to a change in taxes
Tax Multiplier