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Econ Exam 4 (blue sheet)
Terms in this set (13)
Gov. spending more than taxes
Taxes more than Gov. spending
Gov. spending = Taxes
Use of Gov. Budget to influence overall economy, set by President and Congress
What effect will Expansionary Fiscal Policy have on Aggregate Demand
Aggregate Demand increases, taxes decrease, increase in Government spending
What effect will Expansionary Fiscal Policy have on Budget & GDP?
There will be a Budget Deficit, GDP increases
What effect will Contractionary Fiscal Policy have on Aggregate Demand?
AD decreases, decrease government spending /taxes
What effect will Contractionary Fiscal Policy have on the budget & GDP?
There will be a international budget surplus /GDP increase to lower or prevent inflation
What are the three sources from which the Government can borrow when it has a budget deficit
Federal Reserve, Americans, Foreign Investors
What happens when there is a Budget Deficit and Government borrows from Federal Reserve?
Fed pays Government Securites
Can cause inflation
What happens when there is a Budget Deficit and the Government borrows from Americans?
Americans lend money to the Gov. instead of lending to businesses
Decrease in investment spending
Can reduce economic growth
reduces future standard of living
What happens when there is a Budget Deficit and the Government borrows from the foreign sector?
Foreign person buys U.S Government Securities instead, buying US made exports can cause trade deficit.
Supply Side Economics
Set of Government policies designed to help the overall economy by increasing aggregate supply by decrease in tax rates, deregulation of business, economic incentives to promote savings and investment
THIS SET IS OFTEN IN FOLDERS WITH...
Econ Exam 4: Yellow Sheet
Econ: Exam Two (1)
Econ Exam Two (2)
Econ Exam Two: (3)
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