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6 Cards in this Set
- Front
- Back
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Fiscal Policy
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involves the government changing the levels of taxation and government spending in order to influence AD and the level of economic activity
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Monetary policy
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involves using INTEREST RATES and monetary tools to influence the levels of consumer spending and AD
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multiplier effect
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the effect of a bigger final increase in national income as a result of an initial injection into the economy i.e. gov spending, consumer spending or investment
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budget deficit
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difference between what the government spends and gets back in tax revenue
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national debt
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the sum total of all outstanding government borrowing
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balance of payments deficit
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where the total import of trade in goods and services is greater than the total export of trade in goods and services
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