Chapter 15 Terms Flashcards
A bill that sets money aside for specific spending
Appropriations bill
A government program that changes automatically depending on GDP and a person’s income
Automatic stabilizer
A budget in which revenues are equal to spending
Balanced budget
A situation in which the government spends more than it takes in
Budget deficit
A situation in which the government takes in more than it spends
Budget surplus
The idea that free markets can regulate themselves
Classical economics
Government agency that provides economic data to congress
Congressional Budget Office (CBO)
Fiscal policies, like lower spending and higher taxes, that reduce economic growth
Contractionary policies
A group of three respected economists that advise the President on economic policy
Council of Economic Advisers (CEA)
The loss of funds for private investments due to government borrowing
Crowding-out effect
The idea that government spending and tax cuts help an economy by raising demand
Demand-side economics
Fiscal policies, like higher spending and tax cuts, that encourages economic growth
Expansionary policies
A plan for the federal government’s revenues and spending for the coming year
Federal budget
The use of government spending and revenue collection to influence the economy
Fiscal policy
A twelve-month period that can begin on any date
Fiscal year
Very high inflation
Hyperinflation
A form of demand-side economics that encourages government action to increase or decrease demand and output
Keynesian economics
The idea that every one dollar of government spending creates more than one dollar in economic activity
Multiplier effect
All the money the federal government owes to bond holders
National debt
Government office that manages the federal budget
Office of management and budget (OMB)
The maximum output that an economy can produce without big increases in inflation
Productive capacity
A school of economics that believes tax cuts can help an economy by raising supply
Supply-side economics
A government bond that can be rapid within three months to a year
Treasury bill
A government bond that can be issued for as long as 30 years
Treasury bond
A government bond that is repaid within two to ten years
Treasury note
