ECO 1002: Introduction to Macroeconomics - Government Budgets and Fiscal Policy

Flashcards covering key concepts related to government budgets and fiscal policy.

A __ is the amount of spending that exceeded revenue in the current budget year.

budget deficit

A __ is the accumulation of all previous budget deficits.

government debt

The __ is a budgetary system where current workers support current retirees in Social Security.

PAYGO (pay-as-you-go) system

An __ fiscal policy requires an act of Congress or a change in law.

discretionary

Policies that automatically change with the state of the economy are known as __.

automatic stabilizers

The __ Curve illustrates the non-linear relationship between tax rates and government revenues.

Laffer

The __ propensity to consume (MPC) indicates what proportion of additional income is spent on consumption.

Marginal

A tax rate that grows as income increases is classified as a __ tax.

progressive

When government borrowing increases, private savings rise by about __ cents for each dollar of increased borrowing.

30

A __ occurs when imports exceed exports, indicating additional outflow of money.

trade deficit