Macroeconomics Chapter 10

Front 1

fiscal policy

Back 1

government spending and tax policy

Front 2

transfer payments

Back 2

payments by government to individuals or firms, including social security payments, unemployment comp and interest payments

Front 3

disposable income

Back 3

income remaining for consumption or saving after subtracting taxes and adding transfer payments

Front 4

tax multiplier

Back 4

the impact of a change in a lump sum tax on economic equilibrium expressed mathematically as /\Y/ /\T = -(mult)(mpc)

Front 5

expansionary fiscal policy

Back 5

the use of government spending transfer payments, or tax cuts to stimulate a higher level of economic activity

Front 6

balanced budget multiplier

Back 6

the impact of equilibrium output of simultaneous increases in equal size in government spending and taxes

Front 7

contractionary fiscal policy

Back 7

reductions in government spending or transfer payments, or increases in taxes, leading to a lower level of economic activity

Front 8

government outlays

Back 8

total government expenditures including spending on goods and services and transfer payments

Front 9

government bond

Back 9

an interest bearing security constituting a promise to pay at a specific future time

Front 10

automatic stabilizers

Back 10

tax and spending institutions that tend to increase government revenues and lower government spending during economic expansions, but lower revenues and raise government spending during economic recessions

Front 11

time lags

Back 11

the time elapsing between the formulation of an economic policy and its actual effects on the economy

Front 12

supply-side economics

Back 12

an economic theory that emphasizes policies to stimulate production, such as lower taxes

Front 13

trade deficit

Back 13

an excess of imports over exports, causing net exports to be negative