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20 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What may be in order when a recession occurs?
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Discretionary Fiscal Policy; either:
Expansionary or Contrationary |
3 term phrase;
a description of the 2 types of active forms |
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What fiscal policy is described to be ACTIVE?
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Discretionary
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What fiscal policy is described to be PASSIVE?
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Non-Discretionary
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What 3 things can the government do to stimulate the economy?
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[1] Increase/ Gvrnmt spending.
[2] Reduce taxes. [3] Use some combination of the 1 & 2. |
Deficit is high,
you pay this in april 1+2=1&2 |
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Economists use the ______ budget to adjust the actual Federal Budget deficits and surpluses to eliminate the automatic changes in tax revenues.
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Full-Employment Budget
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Half?
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How is the Full-Employment budget used?
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To figure tax rates and gvnmt spending HAD it achieved full employment
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rates? spending?
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What are the 3 "Problems of Timing", experienced with fiscal policy?
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[1] Recognition lag
[2] Administrative lag [3] Operational lag |
Lag
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What is Recognition lag as it relates to fiscal policy?
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A delay in awareness that the beginning of a recession or inlfation is going to occur.
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Delay
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What is Administrative lag as it relates to fiscal policy?
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The delay in recognizing and the time needed to create a fiscal policy by the govnmt.
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Delay...needed
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What is Operational lag as it relates to fiscal policy?
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The time it takes when the actual action is taken and that action effects output, employment, or price level.
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Act, realization
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Problems of timing, Political Considerations, and Future Policy Reversals are examples of?
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Criticisms of Fiscal Policy
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...Policy
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Offsetting State and Local Finance, and the Crowding-out Effect are examples of?
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Criticisms of Fiscal Policy
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...Policy
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Shocks originating from abroad and Net Export Effect are examples of?
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Criticisms of Fiscal Policy
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...Policy
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Political considerations as a criticism of fiscal policy infers?
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That politicians may use tactics that are effective in a short duration, but economically inappropriate.
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A strong economy needed at election time...?
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Future policy reversals as a criticism of fiscal policy infers?
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Fiscal policy may fail if households expect future reversals of policy.
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Tax increase? Tax decrease? Who knows?
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Offsetting State and Local Finance as a criticism of fiscal policy infers?
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These fiscal policies often worsen rather than correct recession or inflation.
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These policies incorporate requirements to balance their budgets
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Policies from abroad which can effect the economy is known as...
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Shocks originating from abroad
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Monetary agents keep the supply of money constant, but the gvnmt engages in expansionary policy thereby borrowing more money... is known as what effect?
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Crowding-Out Effect
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If the gvnmt uses expansionary policy, and increase interest rates, exports declines as known as...
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Net export effect
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What is Net export effect?
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The gvnmt uses expansionary policy, and increase interest rates, exports declines.
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