4.5.3 Public sector finances

Question 1

Automatic stabilisers

Question 2

Discretionary fiscal policy

Answer 2

Deliberate/direct
alteration of government expenditure/taxation
designed to achieve its economic objectives.

Question 3

National debt

Answer 3

Cummulative total of past fiscal deficits.

Question 4

Fiscal deficit

Answer 4

Government spending is greater than tax revenue.

Question 5

Structural deficits

Answer 5

A long-term budget deficit that exists regardless of the economic cycle.

Question 6

Cyclical deficits

Answer 6

A temporary budget deficit that occurs due to the economic cycle, especially during recessions.