Details Title: Ch 14:Fiscal & Monetary Policy Description: Unit 5 - Foundations of Macroeconomics Total Flash Cards: 16 Created: 01/22/2008 11:34:46		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Economics Flashcards
Cards in this set: Term Fiscal Policy Definition Adjusting the federal budget to influence employment and production Term Federal Budget Definition An annual statement of payments, receipts and surplus or deficit of the government of Canada Term Budget Surplus Definition The budget balance when receipts exceeds payments Term Budget Deficit Definition The budget balance when payments exceeds receipts Term Balanced budget Definition The budget balance when receipts equal payments Term Discretionary fiscal policy Definition A fiscal policy that is initiated by an act of Parliament Term Automatic Fiscal Policy Definition A fiscal policy action that is triggered by the state of the economy, such as an increase in payments to the unemployed and a decrease in tax receipts triggered by recession Term Government expenditure multiplier Definition The magnification effect of a change in government expenditure on goods and services on aggregate demand Term Tax multiplier Definition The magnification effect of a change in taxes on aggregate demand Term Balanced Budget Multiplier Definition The magnification effect on aggregate demand of simultaneous changes in government expenditure and taxes that leave the budget balance unchanged Term Automatic stabilizers Definition Features of fiscal policy that stabilize real GDP without explicit action by the government Term Induced taxes Definition Taxes that vary with real GDP Term Induced transfer payments Definition Payments made under social prograns such as unemployment & welfare benefits, the size of which depends on the state of the economy Term Describe the federal budget process and explain the effects of fiscal policy Definition P.207 Term Describe the Bank of Canada's monetary policy process and explain the effects of monetary policy Definition P.207 Term Describe the main debates about how fiscal and monetary policy should be used to improve macroeconomic performance Definition P.207