Chapter 15 Terms

Question 1

A bill that sets money aside for specific spending

Answer 1

Appropriations bill

Question 2

A government program that changes automatically depending on GDP and a person’s income

Answer 2

Automatic stabilizer

Question 3

A budget in which revenues are equal to spending

Answer 3

Balanced budget

Question 4

A situation in which the government spends more than it takes in

Answer 4

Budget deficit

Question 5

A situation in which the government takes in more than it spends

Answer 5

Budget surplus

Question 6

The idea that free markets can regulate themselves

Answer 6

Classical economics

Question 7

Government agency that provides economic data to congress

Answer 7

Congressional Budget Office (CBO)

Question 8

Fiscal policies, like lower spending and higher taxes, that reduce economic growth

Answer 8

Contractionary policies

Question 9

A group of three respected economists that advise the President on economic policy

Answer 9

Council of Economic Advisers (CEA)

Question 10

The loss of funds for private investments due to government borrowing

Answer 10

Crowding-out effect

Question 11

The idea that government spending and tax cuts help an economy by raising demand

Answer 11

Demand-side economics

Question 12

Fiscal policies, like higher spending and tax cuts, that encourages economic growth

Answer 12

Expansionary policies

Question 13

A plan for the federal government’s revenues and spending for the coming year

Answer 13

Federal budget

Question 14

The use of government spending and revenue collection to influence the economy

Answer 14

Fiscal policy

Question 15

A twelve-month period that can begin on any date

Answer 15

Fiscal year

Question 16

Very high inflation

Answer 16

Hyperinflation

Question 17

A form of demand-side economics that encourages government action to increase or decrease demand and output

Answer 17

Keynesian economics

Question 18

The idea that every one dollar of government spending creates more than one dollar in economic activity

Answer 18

Multiplier effect

Question 19

All the money the federal government owes to bond holders

Answer 19

National debt

Question 20

Government office that manages the federal budget

Answer 20

Office of management and budget (OMB)

Question 21

The maximum output that an economy can produce without big increases in inflation

Answer 21

Productive capacity

Question 22

A school of economics that believes tax cuts can help an economy by raising supply

Answer 22

Supply-side economics

Question 23

A government bond that can be rapid within three months to a year

Answer 23

Treasury bill

Question 24

A government bond that can be issued for as long as 30 years

Answer 24

Treasury bond

Question 25

A government bond that is repaid within two to ten years

Answer 25

Treasury note