Chapter 16. Economic Policy Flashcards
Monetary policy
Government policy that attempts to control the economy by controlling the amount of money in circulation
Fiscal policy
Goverment policy that attempts to control the economy by controlling taxing and spending
Inflation
A rise in general price level in relation to amount of money in circulation and the amount of products
Gross domestic product
The value of all goods and services produced by an economy during a specific amount of time
Excise tax
A consumer tax on a specific type of merchandise; sin tax
Tariff
A tax levied on imports to protect the nations industries
Budget deficit
The condition that exists when the federal government raises less revenue than it spends
National debt
The total amount of money the federal government has borrowed to finance its deficit spending throughout the years
Progressive tax
A tax graduated so that those who make more money are pay a larger fraction of there income
Regressive tax
A tax where people with lower incomes pay more of the fraction of their income
Office of management and budget
The presidential staff agency serves as a clearinghouse for budgetary request
Congressional budget office
An agency of congress that that analyzes presidential budget recommendations and predicts cost
Value added tax
A tax on increased value of product a tech stage of production and distribution
Lasses faire economics
A theory that opposes government interference in economic affairs
Keynesian economics
Government should spend more during economic slumps to stimulate the economy
