Unit 9- The Government & The Economy Vocabulary

Front 1

Entitlement

Back 1

A required government expenditure that continues from one year to thenext.

Front 2

Fiscal policy

Back 2

A government’s use of spending and taxation to influence the economy.

Front 3

Tax

Back 3

The money that people and businesses pay to support the activities ofthe government.

Front 4

Gross Domestic Product (GDP)

Back 4

The total amount of goodsand produced within a country.

Front 5

Aggregate demand

Back 5

The total demand of goodsand services at a given price and given time.

Front 6

Expansionary policy

Back 6

Intentionto increase the overall money supply to encourage economic growth or todecrease inflation.

Front 7

Contractionary policy

Back 7

Intention to decrease theoverall money supply to discourage spending.

Front 8

Discretionary spending

Back 8

Spendingthat Congress decides on each budget year.

Front 9

Mandatory Spending

Back 9

Spending that Congress mustby law include in each year’s budget.

Front 10

Recession

Back 10

Two consecutive fiscalyearly quarters in which there is negative economic growth by GDP.

Front 11

Inflation

Back 11

Pricesof goods and services rise faster than employee wages and/or the buying powerof currency.

Front 12

Deflation

Back 12

Decline in price for goodsand services usually caused by decrease in the money supply or availablecredit.

Front 13

Progressive tax

Back 13

Government tax chargesincrease based on the amount of personal income.