The Budget Balance:
The difference between government's taxes and its spending on Goods/Services and Gov.transfers in a given year.
What is 'The Budget Balance'.
Will almost always rise with increasing unemployment, and fall with decreasing unemployment.
What is 'The Budget Deficit'.
Falling tax revenue and rising transfer payments that push the budget to a deficit.
What is 'The consequences of a recessionary gap'.
The accumulation of all past deficits, minus all past surpluses.
What is 'The National Debt'.
The Governments debt as a percentage of GDP.
What is 'The Debt-GDP Ratio'.
>A Positive budget balance,
> A Negative budget balance.
What is:
> 'A Budget Surplus
> A Budget Deficit'.
When a government estimate what the budget balance would be if there were neither a Recessionary nor inflationary gap.
What is 'The Cyclically Adjusted Budget Balance'.
Rising tax revenue and falling transfer payments that push the budget to a surplus.
What is 'The consequences of an inflationary gap'.
Government Debt help by individuals and Institutions outside of the government.
What is 'Public Debt'.
The spending promises made by a government that are effectively a debt not included in debt statistics.
What is ' Implicit Liabilities'.
Fiscal Policies that include, Increasing Taxes, Decreasing transfers and Decreasing Government Spending.
What is 'Contractionary Fiscal Policies'.
What is 'Automatic Stabilizers'.
The need to increase taxes and decrease government spending.
What is 'The consequences of a recessionary gap'.
The limitation of private investment spending due to increasing government borrowing.
What is 'Crowding Out'.
SGovernment = T- G- TR.
What is 'The Budget Balance Formula/Calculation'.
Declining tax revenues (due to declining incomes/profits) and rising transfer payments (to unemployed and struggling individuals).
What is 'The consequence of an economic recession'.
The need to decrease taxes and increase government spending.
What is 'The consequences of an inflationary gap'.
The cause of money being taken away from future obligations such as education, the military etc.
What is ' Increasing government debts'.
Fiscal Policies that include, Cutting Taxes, Increasing Transfers and Increasing Government Spending.
What is 'Expansionary Fiscal Policy'.
Increasing tax revenues (due to declining incomes/profits) and falling transfer payments (to unemployed and struggling individuals).
What is 'The consequence of an economic growth (a period of...)'.
The allowing of deficits in bad years, and surplus in good years.
What is 'a balance budget on average'.
Draw and label and Recessionary Gap Diagram.
Drawing.
Draw and label and Inflationary Gap Diagram.
Drawing.