Fiscal Policy

Question 1

Current spending

Answer 1

Government spending on day to day running of the economy

Question 2

Capital spending

Answer 2

Government spending on improving productive capacity of economy

Question 3

Transfer payments

Answer 3

Government payments to individuals for which no service is given in return (Benefits)

Question 4

Balanced budget

Answer 4

Where G=T

Question 5

Budget deficit

Answer 5

Where G>T in a financial year (PSNCR)

Question 6

Budget surplus

Answer 6

Where G

Question 7

Demand side fiscal policy

Answer 7

Changes in the levels of G or T in order to manipulate AD

Question 8

Discretionary fiscal policy

Answer 8

Deliberate manipulation of G and T to influence AD

Question 9

Expansionary fiscal policy

Answer 9

Manipulating G and T in order to boost AD

Question 10

Contractionary fiscal policy

Answer 10

Manipulating G and T in order to reduce AD

Question 11

Supply side fiscal policy

Answer 11

Manipulating G and T in order to create improvements in the supply side of the economy

Question 12

Unemployment trap

Answer 12

Where individuals receive more in benefit payments than they would if they were in a job.