CH 30 Flashcards

1
Q

tax and spending rules that have the effect of slowing down the rate of decrease in aggregate demand when the economy slows down and restraining aggregate demand when the economy speeds up, without any additional change in legislation

A

automatic stabilizers

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2
Q

when government spending and taxes are equal

A

balanced budget

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3
Q

when the federal government spends more money than it receives in taxes in a given year

A

budget deficit

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4
Q

when the government receives more money in taxes than it spends in a year

A

budget surplus

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5
Q

fiscal policy that decreases the level of aggregate demand, either through cuts in government spending or increases in taxes

A

contractionary fiscal policy

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6
Q

a tax imposed on corporate profits

A

corporate income tax

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7
Q

federal spending and borrowing causes interest rates to rise and business investment to fall

A

crowding out

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8
Q

the government passes a new law that explicitly changes overall tax or spending levels with the intent of influencing the level or overall economic activity

A

discretionary fiscal policy

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9
Q

a tax on people who pass assets to the next generation—either after death or during life in the form of gifts

A

estate and gift tax

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10
Q

a tax on a specific good—on gasoline, tobacco, and alcohol

A

excise tax

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11
Q

fiscal policy that increases the level of aggregate demand, either through increases in government spending or cuts in taxes

A

expansionary fiscal policy

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12
Q

the time it takes for the funds relating to fiscal policy to be dispersed to the appropriate agencies to implement the programs

A

implementation lag

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13
Q

a tax based on the income, of all forms, received by individuals

A

individual income tax

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14
Q

the time it takes to get a fiscal policy bill passed

A

legislative lag

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15
Q

or the tax that must be paid on all yearly income

A

marginal tax rates

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16
Q

the total accumulated amount the government has borrowed, over time, and not yet paid back

A

national debt

17
Q

a tax based on the pay received from employers; the taxes provide funds for Social Security

A

payroll tax

18
Q

a tax that collects a greater share of income from those with high incomes than from those with lower incomes

A

progressive tax

19
Q

a tax that is a flat percentage of income earned, regardless of level of income

A

proportional tax

20
Q

the time it takes to determine that a recession has occurred

A

recognition lag

21
Q

a tax in which people with higher incomes pay a smaller share of their income in tax

A

regressive tax

22
Q

the budget deficit or surplus in any given year adjusted for what it would have been if the economy were producing at potential GDP

A

standardized employment budget