Fiscal Policy w/multipliers + Phillips Curve

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11 Terms

1
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What are the tools of fiscal policy?

Government spending and taxes

2
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Government spending has a direct or indirect impact on AD

direct

3
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Taxes has a direct or indirect impact on AD

indirect

4
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A shift in AD will…

move along the curve (SRCP)

5
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A shift in AS will…

will move the entire SRPC

6
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What does MPS stand for?

Marginal Propensity to Save

7
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Spending Multiplier Equation

1/MPS

8
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What does MPC stand for?

Marginal Propensity to Consume

9
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What does MPC stand for?

Marginal Propensity to Consume

10
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The tax multiplier is…

always 1 less than the spending multiplier

11
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money multiplier equation

1/reserve requirement