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Definition
| the vertical distance between AS and AE at full employment. Y* |
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Definition
| the vertical distance between AS and AE at full employment. Ye |
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Definition
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| government purchases(G) in excess of net taxes(Tn). G>Tn |
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Definition
| net taxes(Tn) in excess of government purchases (G). Tn>G |
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Definition
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Term
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Definition
| adjective meaning having to do with revenues (income) and expenditures (spending, outlays) |
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Term
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Definition
| for the federal government, 10/1-9/30. Named for the year in which in which it mainly falls, the year in which it ends |
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Term
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Definition
| adjective meaning causing the business cycle to be more pronounced |
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Term
| "Sir" John Maynard Keynes |
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Definition
| British economist who suggested that raising AE by purposely running a federal budget deficit would be expansionary. His ideas "made their way by train to Washington, D.C. |
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Term
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Definition
| use by the federal government of taxes, transfers, and government purchases to move the economy toward a non-inflationary level of Y* via manipulation of AE (or final sales if actual) |
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Term
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Definition
| either "on the books" or discretionary |
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Term
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Definition
| the automatic change in the relationship of G and Tn which occurs as Y rises and falls. Cushions economy as Y falls and dampens inflation as Y rises. Also called automatic stabilization and/or non-discretionary fiscal policy as it is "on the books" already. |
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Term
| discretionary fiscal policy |
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Definition
| any deliberate change in Tn and/or G to change AE, to encourage the economy to move toward a non-inflationary Y*. Considered liberal. |
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Term
| discretionary fiscal policy |
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Definition
| any deliberate change in Tn and/or G to change AE, to encourage the economy to move toward a non-inflationary Y*. Considered liberal. |
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Term
| expansionary fiscal policy |
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Definition
| decreases in taxes, increases in transfers, and/or increases in G to raise AE and stimulate growth in Y and employment. |
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Term
| "contractionary" fiscal policy |
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Definition
| increases in taxes, and/or decreases in transfers and/or G to lower excess AE and dampen inflation, hopefully, not creating contraction at the same time. |
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Term
| "contractionary" fiscal policy |
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Definition
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Term
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Definition
| equal changes in G and Tn. "pay-as-you-go" |
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Term
| balanced budget multiplier rule |
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Definition
| equal, like direction changes in Tn and G will result in an equal, like direction change in Y. |
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Term
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Definition
| balanced budget changes are procyclical. |
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Term
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Definition
sum of all outstanding government securities
-this is a cumulative amount. There is a so-called debt limit, often raised by Congress and the President |
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Term
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Definition
| maximum amount of government securities that can be outstanding without further legislation |
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Term
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Definition
IOU's against the U.S. treasury. Nicknamed "Treasurys"
-the Treasury sells these to finance deficits. |
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Term
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Definition
| Government securities are purchased by those who aim to have a safe form of investment with a given term to maturity and guaranteed return. The purchasers of these securities are creditors to the Treasury. |
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Term
| Treasury Inflation Protected Securities (TIPS) |
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Definition
| long-term gov securities are indexed in the rate of inflation so that the interest earned keeps pace with inflation. |
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Term
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Definition
| shortfall of revenues (income, receipts) relative to expenditures (spending) |
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Term
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Definition
| what are the three main types of government securities? |
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Term
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Definition
| type of government security (also called savings bonds) 10-30 years |
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Term
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Definition
| type of government security 2-10 years |
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Term
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Definition
| type of government security (also called T-bills) 13,26,52 weeks |
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Term
| domestic, foreign, federal reserve (the fed) |
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Definition
| what are the 3 classifications of creditors? (creditors are buyers of government securities) |
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Term
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Definition
| classification of creditor. is internally held debt. |
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Term
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Definition
| classification of creditor. is externally held debt. PRC(China) and the asian tigers hold much of this. |
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Term
| Federal Reserve, the "Fed" |
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Definition
| classification of creditor. is a monetized debt. |
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Term
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Definition
| $ taxes paid/$taxable income |
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Term
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Definition
| $ change in taxes paid/ $ change in taxable income |
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Term
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Definition
is the percentage of change in income that is paid in taxes.
this tax rate applies to separate chunks of income (tax brackets) |
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Term
| diminishing marginal utility argument |
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Definition
| states as an individual successive dollars, each successive dollar is needed less, appreciated less, and therefore should be taxed at a higher rate. |
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Term
| diminishing marginal utility argument |
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Definition
| this is consistent with greater egalitarianism and the practice of distributive justice; however, it is inconsistent with market justice |
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Term
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Definition
| ____________ often favor progressivity, however, ___________ favor lesser progressivity. |
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Term
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Definition
| this is gross income minus "loopholes" (so-called personal exemptions and deductions) |
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Term
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Definition
| the overall percentage of total income paid on taxes, is the number of dollars paid in taxes divided by the overall income. |
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