Macroeconomics Flashcards
What is a Tax?
A Tax is a government levy on income and expenditure
What is a Progressive Tax?
Where those with a higher ability to pay tax are charged more.
What is a regressive tax?
A tax where those with a higher ability to pay are charged a lower rate of tax.
What is Fiscal Policy?
Fiscal Policy is the use of Taxation and Government Spending to influence economic growth and employment
What is expansionary fiscal policy?
Expansionary Fiscal Policy stimulates the economy by increasing government spending and lowering tax
What is Contractionary Fiscal Policy?
Contractionary Fiscal Policy reduces the level of economic activity by decreasing spending and raising taxes
What is Monetary Policy?
Monetary Policy is the manipulation of interest rates, exchange rates, and the money supply to control the spending and investment in an economy
What is Expansionary Monetary Policy?
expanding the money supply by lowering interest rates
What is Contractionary Monetary Policy?
aims to reduce spending by increasing interest rates
