Ch 18 - Fiscal Policy

is increasing government spending and /or decreasing tax collections in order to stimulate the macroeconomy.

given an extra dollar, how much of it is saved.

are government policies already in place that promote deficit spending during recessions and surplus budgets during expansions.

is the appropriate method to remedy inflation.

leads to extra income for firms.

The shortfall of real ________ from its full employment potential is known as the recessionary gap, which is shown in panel A from Y1 to Yp.

Crowding out is reflected in a(n) ________ curve that shifts back to the left after a fiscal policy has just shifted to the right.

is changing the level of government spending or tax revenues to achieve economic stability.

Higher taxes are the ________ to fight inflation.

the surefit of real GDP over its full- employment potential.

increases spending or reduced tax collections, which increases aggregate demand.

a financial instrument that allows the federal government to borrow funds.

a loan which has the duration of 6- 30 years.

occurs when tax revenues exceed government spending.

a loan which has the duration of a year or less.

occurs when government spending exceeds tax revenues.

a loan which has the duration of 1- 5 years.

given an extra dollar, how much of it will be spent.

is decreasing government spending and /or increasing tax collections in order to cool off the economy and lower the price level.

A decrease in government spending of any amount, matched by a tax decrease, creates a decrease in ________ of that amount.

The decrease in investment spending by businesses can offset the governments ________.

The ________ runs a surplus when tax revenues exceed government expenditures.

Cuts in ________ are the appropriate fiscal policy to fight inflation.

In the Long- run adjustment to a recessionary gap, the ________ and Aggregate supply curves convey an economy where the market is producing below its potential.

is changing the level of government spending or tax revenues to achieve economic stability

is increasing government spending and/or decreasing tax collections in order to stimulate the macroeconomy

when federal government expenditures exceed tax revenues

is decreasing government spending and/or increasing tax collections in order to cool off the economy and lower the price level

the surefit of real GDP over its full-employment potential

is the increase in interest rates and subsequent decline in spending that occur when government borrows money to finance a deficit

given an extra dollar, how much of it will be spent

given an extra dollar, how much of it is saved

when a governments budget remains balanced with spending and tax collections, if spending increases, taxes increase as well

are government policies already in place that promote deficit spending during recessions and surplus budgets during expansions

occurs when tax revenues exceed government spending

occurs when government spending exceeds tax revenues

When national government spending exceeds tax revenues

a financial instrument that allows the federal government to borrow funds

a loan which has the duration of a year or less

a loan which has the duration of 1-5 years

a loan which has the duration of 6-30 years