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Economics 2. Macroeconomics > fiscal policy > Flashcards

Flashcards in fiscal policy Deck (15)
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1
Q

tax

A

compulsory contribution to the government revenue

2
Q

direct tax

A

a tax imposed by governments directly on an individual or organization

3
Q

indirect tax

A

a tax imposed by government directly on spending

4
Q

government budget

A

government document presenting the government’s proposed revenues and spending for a financial year

5
Q

current expenditure

A

expenditure on goods and services consumed within the current year

6
Q

capital expenditure

A

money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.

7
Q

balanced budget

A

when budget = revenue

8
Q

national debt

A

the central government debt.

9
Q

budget surplus

A

when export higher than imports

10
Q

budget deficit

A

when export are lower than imports

11
Q

fiscal policy

A

refers to the government’s policy on taxation (direct and indirect),government expenditure and transfer payments and their affect on aggregate demand and aggregate supply.

12
Q

expansionary fiscal policy

A

designed to stimulate the economy during or anticipation of a business-cycle contraction

13
Q

contractionary fiscal policy

A

Is a decrease in government expenditure and/or an increase in taxes that causes the government’s budget deficit to decrease or its budget surplus to increase

14
Q

fiscal stimulus

A

An increase in public spending or a reduction in the level of taxation that might be performed by a government in order to encourage economic growth.

15
Q

the crowding out effect

A

A situation when increased interest rates lead to a reduction in private investment spending such that it dampens the initial increase of total investment spending.