Term
| Theory of Liquidity Preferences |
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Definition
| Keynes's theory that the interest rate adjusts to bring money supply and money demand into balance |
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Term
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Definition
| the setting of the level of goverment spending and taxation by government policymakers |
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Term
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Definition
| the additional shifts in aggregate demand that result when expansionary fiscal policy increases income and thereby increase consumer spending |
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Term
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Definition
| the offset in aggregate demand that results when expansionary fiscal policy raises the interest rate and thereby reduces investment spending |
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Term
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Definition
| changes in fiscal policy that stimulate aggregate demand when the economy goes into recession without policymakers having to take any deliberate action |
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