Fiscal Policy
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20 terms
Terms | Definitions |
|---|---|
 fiscal policy | the use of government spending and revenue collection to influence the economy |
| federal budget | a written document estimating the federal government's revenue and authorizing its spending for the coming year |
| fiscal year | any 12-month period used for budgeting purposes |
| appropriations bill | a bill that authorizes a specific amount of spending by the government |
| expansionary policy | a fiscal policy used to encourage economic growth, often through increased spending or tax cuts |
| contractionary policy | a fiscal policy used to reduce economic growth, often through decreased spending or higher taxes |
| classical economics | a school of thought based on the idea that free markets regulate themselves |
| productive capacity | the maximum output that an economy can sustain over a period of time without increasing inflation |
| demand-side economics | a school of thought based on the idea that demand for goods drives the economy |
| Keynesian economics | a school of thought that uses demand-side theory as the basis for encouraging government action to help the economy |
| multiplier effect | the idea that every one dollar change in fiscal policy creates a change greater than one dollar in the national income |
| automatic stabilizer | a tool of fiscal policy that increases or decreases automatically depending on changes in GDP and personal income |
| supply-side economics | a school of thought based on the idea that the supply of goods drives the economy |
| budget surplus | a situation in which budget revenues exceed expenditures |
| budget deficit | a situation in which budget expenditures exceed revenues |
| Treasury bill | a government bond with a maturity date of 26 weeks or less |
| Treasury note | a government bond with a term of from 2 to 10 years |
| Treasury bond | a government bond that is issued with a term of 30 years |
| national debt | the total amount of money the federal government owes to bondholders |
| crowding-out effect | the loss of funds for private investment caused by government borrowing |
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