Discovery Unit 24 Glossary Flashcards Preview

Discovery Economics > Discovery Unit 24 Glossary > Flashcards

Flashcards in Discovery Unit 24 Glossary Deck (11):
1

fiscal policies

One of the two main tools of macroeconomic policy. Set of policies relating to government spending, taxation, and borrowing.

2

budget surplus

Occurs when tax revenue is greater than spending.

3

budget deficit

Occurs when tax revenue is less than spending.

4

balanced budget

Occurs when government spending and taxes are equal.

5

Government debt

Accumulation of money, over time, that a government has borrowed but has not yet paid back.

6

discretionary fiscal policy

Occurs when the government passes a new law that explicitly changes tax or spending levels.

7

automatic stabilizers

Changes in tax and spending levels that aim to stimulate aggregate demand in a recession and hold down aggregate demand in a potentially inflationary boom, but without the passage of any new laws.

8

Expansionary fiscal policy

Increases the level of aggregate demand through increases in either government spending or transfer payments, or through reductions in taxes.

9

Recognition lag

The time it takes for policymakers to recognize the existence of an economic expansion or a recession.

10

Administrative lag

Time necessary to put a desired policy into effect once economists and policymakers acknowledge that the economy is in an expansion or a recession.

11

Operational lag

The time between the implementation of a fiscal action and when that action affects output, employment, or the price level.