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Public sector borrowing
Fiscal deficit, the difference between tax revenue and spending
Demand-side fiscal policy
Policy that decreases or increases aggregate demand to influence employment, real output and general price level
Deficit financing
When the difference between government revenue and expenditure is paid back by borrowing
Expansionary fiscal policy
When aggregate demand is stimulate to encourage economic growth
Contractionary fiscal policy
Measures to reduce government spending or monetary expansion
Discretionary fiscal policy
Policies to increase or decrease spending or taxation
Sovereign debt problem
A nation’s failure to repay its debt obligations
Supply-side fiscal policy
Measures that help to increase the availability or affordability of goods and services
National debt
Levels of government debt that has accumulated over the years
Cyclical budget deficit
Budge deficit due to the state of the economy
Cyclical budget surplus
budget surplus due to the state of the economy
Structural budget deficit
Part of the budget deficit that is not related to the state of the economy
Principle of taxation
That tax should be: certain in how its calculated, burden proportionate to pay and that collection is efficient and convenient
Progressive atxation
Tax rate increases and income increases
Regressive taxation
Tax that takes more from those with lower incomes
Proportional taxation
Tax rate remains the same, no matter the change in the level of income
Tax threshold
The ratio at which someone is taxed depending on their income
Direct tax
A tax paid directly to who imposed it - i.e. income tax
Indirect tax
A tax on goods or services rather than on an individual or company
Bank rate
The cost of borrowing and rate of return on saving
Central bank
A national bank that is given control over the distribution and production of money and credit
Dividend
Money paid to a shareholder for having a share in the firm
Financial sector
A sectionof the economy tht provides financial services to commercial and retail consumers
Monetary policy
Policies utilised by a central bank to promote sustainable economic growth
Quantitative easing
Expansionary monetary policy that increases the supply of money to promote consumer spending and lending
