AP Macroeconomics Chapter 30 Terms

actress9098's version from 2015-11-19 06:42

Section 1

Question Answer
fiscal policythe government's policies for its spending and for cutting/increasing taxes
Council of Economic Advisors (CEA)Three economists appointed by the president to give advice on his economic decisions
expansionary fiscal policysays that government spending should be increased and taxes decreased (more debt)
budget deficitGovernment spending is > than tax revenues
Contractionary Fiscal PolicySays that government spending should be decreased and taxes increased (pay off debt)
built-in-stabilizeranything that makes a recession worse or prosperity better without officially changing any government fiscal policy
progressive tax systemthe average tax rate rises with GDP
proportional tax systemthe average tax rate stays constant as GDP rises
regressive tax systemthe average tax rate falls as GDP rises
Cyclically adjusted budgetmeasures what deficits or surpluses there would be under current conditions with full employment
cyclical deficitthe amount of deficit created from cycles in the economy
political business cycleswings in economy come from election-driven fiscal policy (campaign promises)

Section 2

Question Answer
Crowding-out effectrises in public sector spending drive down private sector spending
public debtaccumulation of all past and present national deficits and surpluses
U.S. securitiesfinancial tools used by the government to get money when taxes aren't enough
external public debtthe 29% of debt owed by non-American institutions and citizens
public investmentshighways, mass transit systems, job training, healthcare and more