 | Term | Definition |
| |
classical economics |
the idea that free markets can regulate themselves |
| |
productive capacity |
the maximum output that an economy can produce without big increases in inflation |
| |
demand-side economics |
the idea that government spending and tax cuts help an economy by raising demand |
| |
Keynesian economics |
a form of demand -side economics that encourages government action to increase or decrease demand and output |
| |
multiplier effect |
the idea that every one dollar of government spending creates more than one dollar in economic activity |
| |
automatic stabilizer |
a government program that changes automatically depending on (GDP) and a person's income |
| |
supply-side economics |
a school of economics that believes tax cuts can help an economy by raising supply |
| |
Council of Economics Advisers(CEA) |
a group of three respected economists that advise the President on economic policy |
| Add or remove terms from this set |
