The Federal Budget and Fiscal Policy
This is a tool used to expand or to slow economic growth, to achieve full employment, and to maintain price stability.
What is fiscal policy?
During the New Deal and World War II, the expenditures exceeded revenues, a situation known as?
What is "deficit spending"?
The total amount of money the federal government owes to bondholders.
What is "National debt"
The Fed lowers or raises this to increase or decrease the money supply.
What is discount rate?
The time it takes to implement monetary policy.
What is "inside lag"?
This is a written document estimating the federal government's revenue and authorizing its spending for the coming year.
What is federal budget?
The idea that each dollar spent or not taxed by government creates a change much greater than one dollar in the national income.
What is "The Multiplier effect"?
Occurs in any year when expenditures exceed revenues.
What is "Budget deficit"
The Federal Reserve primarily adjusts this, which is the interest rate that banks charge one another for loans.
What is federal funds rate?
An increased money supply that will lower interest rates, thus encouraging investment spending. (May encourage over borrowing and over investment, followed by layoffs and cutbacks.)
What is "easy money policy"?
The Appropriations Comittee of each house submits these to authorize specific spending, based on the decisions Congress has made.
What are appropriations bills?
The idea that free markets regulate themselves is central to the school of thought known as?
What is "Classical Economics"?
Covering very large deficits by printing more money can cause..
What is "Hyperinflation"
The rate banks charge on short-term loans to their best customers.
What is prime rate?
Economists believe that adjusting the money supply is the most useful tool to improve macroeconomic performance.
What is "monetarism"?
This is a fiscal policy that tries to increase output.
What is expansionary policy?
Uses demand-side theory as the basis for encouraging government action to help the economy.
What is "Keynesian economics"?
The loss of funds for private investment caused by government borrowing is called...
What is "Crowding-out effect."
The buying and selling of government securities in order to alter the money supply.
What is open market operations?
If the economy is experiencing a rapid expansion that may cause high inflation, the Fed may introduce? (It will reduce money supply.)
This is a fiscal policy intended to decrease output.
What is contractionary policy?
Strongly supported individual freedom and pushed for more laissez-faire policies—hallmarks of classical and supply-side economics.
Who is "Milton Friedman"?
What increases as a percentage of GDP during wartime, when government spending increasing faster than taxation, and it falls during peacetime?
What is "Debt"
This is a financial document, such as stock certificate or bond, that represents ownership of corporate shares or the promise of repayment by a company or government.
What is a security?
Questioned economists' ability to influence the economy effectively and had faith in a free economy's ability to self-adjust.
Who is "Friedrich Hayek"?