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30 Cards in this Set

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Contraction
Falling GDP, falling Inflation and Rising unemployment.
Also known as recession
Expansion
Rising GDP, Rising Inflation and Falling unemployment.
Also known as a period of growth
Peak
When the economy has
High GDP, High Inflation and Low unemployment.
Also Known as Boom or Prosperity
Supply
The amount of goods or services available in the economy
GDP
Gross Domestic Product
Trough
Low GDP, Low Inflation and High unemployment.
Also known as a depression
Demand
The amount of goods or services that consumers will take at a particular price.
Labor
Human effort
A government spending and taxation policy to manage the economy is known as:
a. countercyclical policy.
b. fiscal policy.
c. monetary policy.
d. a balanced budget.
e. presidential discretion.
A government spending and taxation policy to achieve macroeconomic is known as:
ANSWER
b. fiscal policy.
Land
Natural resources
Contractionary Fiscal Policy
Taxing and Spending to decrease Demand in the economy(taxes up, spending down)
Capital
Material wealth used or available for use in the production of more wealth.
e.g factories, tools
Enterpreneurship
a person who organizes and manages any enterprise or business usually with considerable initiative and risk. e.g. Bill Gates
An expansionary fiscal policy may include:
a. increases in government spending.
b. discretionary increases in transfer payments.
c. reductions in taxes.
d. All of the above.
An expansionary fiscal policy may include:
ANSWER
d. All of the above.
Scarcity
When there is Insufficiency of amount or supply; shortage.
Expansionary Fiscal Policy
Taxing and Spending to decrease Demand in the economy(taxes up, spending down)
Opportunity Cost
The next best alternative foregone.
Expansionary fiscal policy consists of:
a. increasing government spending.
b. increasing payroll taxes to finance health care.
c. decreasing government spending.
d. raising the minimum wage.
Taxing and Spending to increase Demand in the Economy(taxes down, spending up)
Factors of Production
Land, labor, Capital and Entrepreneurship
Fiscal Deficit
When the government spends more than it collects in taxes (in one year)
Fiscal policy is concerned with:
a. encouraging businesses to invest.
b. regulation of net exports.
c. changes in government spending and/or tax revenues.
d. expanding and contracting the money supply.
Fiscal policy is concerned with:
ANSWER
c. changes in government spending and/or tax revenues.
Fiscal policy is government action to influence aggregate demand and in turn to influence the level of real GDP and the price level, through:
a. expanding and contracting the money supply.
b. regulation of net exports.
c. changes in government spending and/or tax revenues.
d. encouraging businesses to invest.
Fiscal policy is government action to influence aggregate demand and in turn to influence the level of real GDP and the price level, through:
ANSWER
c. changes in government spending and/or tax revenues.
Fiscal Policy tools
Government taxes and government spending
Consumer Price Index
CPI. How we measure Inflation
The government is pursuing an expansionary policy if it:
a. decreases its spending and increases its tax revenues.
b. increases its spending or increases its tax revenues.
c. decreases its spending or reduces its tax revenues.
d. increases its spending and/or reduces its tax revenues.
The government is pursuing an expansionary policy if it:
ANSWER
d. increases its spending and/or reduces its tax revenues.
What are Contractionary Policies?
Fiscal policies, like lower spending, and higher taxes tha reduce economic growth.
What are Expansionary Policies?
Fiscal policies, like higher
spending and tax cuts, that encourage economic growth
What is a Budget Surplus?
A situation in which the government spends more than it takes in.
What is an Appropriations Bill?
A bill that sets money aside for specific spending.
What is Fiscal Policy?
The use of government spending & revenue collection to influence the economy