Ch 15 Flashcards
Subtracting government investment from government purchases gives us the amount of government
consumption expenditures
The largest source of tax receipts for the government is
personal taxes
The type of tax receipts that has shown the largest growth since the end of WWII has been
contributions for social insurance
The type of tax receipts that has shown the slowest growth since the end of WWII has been
corporate taxes
State and local governments rely on ________ as their primary source of tax receipts.
indirect business taxes
The primary deficit is equal to
government purchases + transfers - tax revenues
The deficit is
the amount by which government purchases, transfers, and net interest exceed tax revenues
The political process by which fiscal policy is made
is slow and results in a long lag time for fiscal policy
Provisions in the budget that cause government spending to rise or fall without legislation when GDP falls are known as
automatic stabilizers
Because of automatic stabilizers, in recessions the government budget deficit ______, while in expansions the deficit ______.
rises; falls
The amount the government budget deficit would be if the economy were at full employment is known as
full-employment deficit
Government capital consist of
long-lived physical assets owned by the government
