Term
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Definition
| the purposeful movements in government spending or tax policy designed to direct an economy |
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Term
| Discretionary fiscal policy |
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Definition
| government spending and tax changes enacted at the time of the problem to alter the economy |
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Term
| Non-discretionary fiscal policy |
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Definition
| a set of policies that are built into the system to stabilize the economy |
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Term
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Definition
| any unanticipated economic event |
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Term
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Definition
| an unexpected event which causes aggregate demand to increase or decrease. Results from the uneasiness to track the "feeling" of the economy. |
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Term
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Definition
| an unexpected event which causes aggregate supply to increase or decrease. i.e. more output causes decrease |
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Term
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Definition
| the time it takes to measure the state of the economy |
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Term
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Definition
| the time it takes for congress and the president to agree on a course of action |
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Term
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Definition
| the time it takes for the full impact of a government program or tax change to have its effect on the economy |
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Term
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Definition
| politically motivated fiscal policy used for short term gain just prior to elections. i.e. implementing policies that boost the economy before voting |
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Term
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Definition
| To increase aggregate demand through increases in government spending rather than through tax rebates |
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Term
| Expansionary Fiscal Policy |
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Definition
| moves PI and RGDP to the right |
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Term
| Contractionary Fiscal Policy |
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Definition
| moves PI and GDP to the left |
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Term
| Negative aggregate demand shock |
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Definition
| moves aggregate demand curve to the left on AS curve |
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Term
| Positive aggregate demand shock |
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Definition
| moves aggregate demand curve to the right on AS curve |
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