Chapter 17 Flashcards
1
Q
Fiscal Policy
A
Federal Government policy on taxes, spending and borrowing
2
Q
Categories to fight a recession
A
- Government spends money
2.government cuts taxes, and people spends money
3
Q
The multiplier effect
A
additional increase in AD caused when fiscal policy increases income
4
Q
Crowding Out
A
decrease in private spending that occurs when the government increases spending
5
Q
Public vs Private
A
Public is government, Private is people
6
Q
expansionary fiscal policy most likely to be effective when the
A
private sector is reluctant to spend or invest
7
Q
Lags
A
RLIEE (Recognition, Legislative, Implementation, Effectiveness, Evaluation and adjustment)
8
Q
Which of the following is NOT fiscal policy
A
Managing the money supply
