Macroeconomic Concepts and Fiscal Policy

A collection of flashcards covering key concepts about long-run aggregate supply, fiscal policy, sustainable development goals, and human rights.

Long-Run Aggregate Supply Curve (LRAS)

The LRAS is vertical because, in the long run, the potential output an economy can produce isn’t related to the price level.

Natural Level of Output

The quantity of output that an economy can sustain in the long run when all resources are fully utilized.

Sustainable Development Goals (SDGs)

The 17 global goals adopted by the United Nations in 2015 to end poverty, protect the planet, and ensure prosperity for all.

Fiscal Policy

Government policies regarding taxation and spending to influence economic conditions.

Contractionary Fiscal Policy

A policy aimed at reducing government spending or increasing taxes to decrease inflation.

Expansionary Fiscal Policy

A policy aimed at increasing government spending or decreasing taxes to stimulate economic growth.

Direct Taxes

Taxes paid directly to the government by the taxpayer, such as income tax.

Indirect Taxes

Taxes that are not paid directly to the government but are included in the price of goods and services.

Excise Tax

A type of tax imposed on specific goods, often referred to as a 'sin tax'.

Value-Added Tax (VAT)

A consumption tax added to the price of goods and services at each stage of production or distribution.

Aggregate Demand

The total demand for goods and services within a particular market.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period.

Open Market Operations

The buying and selling of government bonds by a central bank to control the money supply.

Reserve Requirement

The percentage of deposits that banks must hold as reserves and not lend out.

Interest Rate

The percentage charged on borrowed money or earned on invested funds.

Human Rights

Rights inherent to all human beings regardless of race, sex, nationality, or other status.

Direct Beneficiaries (of fiscal programs)

Individuals or entities that directly receive assistance or benefits from government programs.

Disposable Income

Income remaining after deduction of taxes and social security charges.

Behavioral Economics

A field of economics that examines psychological factors affecting economic decision-making.

Consumer Preferences

The preferences of consumers that dictate their purchasing behavior, influenced by environmental awareness.