Fiscal Policy (ECON 202)

These flashcards cover key vocabulary related to fiscal policy concepts from the ECON 202 lecture notes.

Fiscal Policy

Government decisions regarding taxation and government spending.

Monetary Policy

Actions by a country's central bank to control the money supply and interest rates.

Expansionary Fiscal Policy

Government policy actions that lead to increases in aggregate demand.

Contractionary Fiscal Policy

Government policy actions that lead to decreases in aggregate demand.

Stabilization Policies

Actions to move the economy closer to full employment or potential output.

Inside Lags

Time it takes to formulate a policy after an economic shift.

Outside Lags

Time it takes for a policy to show real effects after being implemented.

Federal Budget

A document that describes federal government spending and how it pays for it.

Budget Deficit

When the government spends more than it receives in tax revenues.

Automatic Stabilizers

Taxes and transfer payments that stabilize GDP without requiring explicit government actions.

Entitlements

Government programs providing benefits to individuals, such as Social Security and Medicare.

Discretionary Spending

Federal spending that is debated and approved on an annual basis.

Corporate Income Tax

A tax levied on the profit of corporations.

Supply-Side Economics

An economic theory that advocates reducing taxes to encourage investment and economic growth.

Laffer Curve

A concept illustrating the relationship between tax rates and tax revenue.