Term
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Definition
| A year that begins on Oct. 1 and ends on Sept. 30 of the next year |
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Term
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Definition
| when tax revenues equal outlays |
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Term
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Definition
| when tax revenue exceeds outlays |
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Term
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Definition
| when outlays exceed tax revenues |
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Term
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Definition
| amountof debt outstanding that arises from past budget deficits |
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Term
| The tax revenue side of the budget includes |
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Definition
personal income tax
social security tax
corporate income tax
indirect tax |
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Term
| Government entitlements include |
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Definition
Social Security
Medicare
Medicaid |
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Term
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Definition
defense
non- defense discretionary spending
interest spending |
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Term
| Keynesian: Fiscal Stimulus |
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Definition
| An increase in government spending or a decrease in tax revenues which boost real GDP and creates or saves jobs |
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Term
| Counter arguments to Keynesian |
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Definition
overestimates multiplier effect
incapable ofworking fast enough to be useful
"crowds out" investment
bigger government
lower potential GDP
A slowerreal GDP Growth Rate
Greater Burden of government debt on future generations
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Term
| A change in the government budget |
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Definition
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Term
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Definition
| changes by a greater amount than the initial change in the item on the govt budget |
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Term
Which has a higher magnitude:
tax multiplier or government expenditure |
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Definition
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Term
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Definition
measure of national income
C + I + G |
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Term
| Marginal Propensity to consume |
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Definition
level of willingness
mpc/(1-mpc) |
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Term
| Aggregate demand has an upward/downward slope |
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Definition
| downward because atlower price levels a greater quantity is demanded |
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Term
| Tax multiplier is based upon |
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Definition
the populations willingness to consume
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Term
| A small MPC represents a small/large amount of savings & consumption |
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Definition
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Term
| When a tax decrease occurs what will consumers do with their money? |
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Definition
| spend part of it and save part of it |
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Term
| 4 factors of discretionary fiscal spending |
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Definition
law making time lag
shrinking area of law maker discretion
estimating potential gdp
economic forecasting |
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Term
| Contractory fiscal policy |
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Definition
decrease in govt expenditure on G+S
Real GDP is above Potential GDP
High inflation
decreases govt purchases, increase in taxes to correct inflation problems of business cycle expansion
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Term
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Definition
| a fiscal policy action that is triggered by the state of the economy |
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Term
| Discretionary Fiscal Policy |
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Definition
| policy action initiated by congress to promote full employment, price stability, and economic growth |
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Term
| What are some examples of discretionary fiscal policy |
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Definition
increase in defensive spending
cut in income tax
construction
research |
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Term
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Definition
| Decrease in tax rates may increase tax revenue if taxes are "too high" lower rates may stimulate economic growth |
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