Quiz #7 Vocab Flashcards
Reduce tax rates
Increase the level of government spending
Expansionary fiscal policy (used in a recession)
The government’s actions with tax rates and spending
Fiscal policy
When the tax revenue is less than expenses
The amount must be borrowed
The national debt rises
Budget deficit
When tax revenue is more than expenses
The national debt falls (in theory)
Budget surplus
Looking for first job
In between jobs by choice
Frictional unemployment
Lost your job due to downturn in buisness
Cyclical unemployment
An individual does not have the skills that are in demand
The economy has changed such that the persons skills are obsolete
Structural unemployment
Demand for all goods, services, capital goods in an economy C+I+G+NX
Aggregate demand
Total capacity in a nation to produce goods and services; Availability of land,labor,capital, entrepreneurs and productive technology
Aggregate supply
Total amount of money owed by the government to bond holders
National debt
Low interest rates cause
More borrowing by consumers and firms
The currency to depreciate
High interest rates cause
Less borrowing by consumers and forms
The currency to appreciate
How much production is accomplished per worker
“Output per input”
Productivity
Expenses=revenues; debt does not change
Balanced budget
Government payment to a firm in order to increase their ability to compete
Subsidy
