VocabularyTerms3

VocabularyTerms3 - ECON 0110-Introduction to Macroeconomics...

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ECON 0110—Introduction to Macroeconomics Vocabulary Chapter 12--Fiscal Policy Automatic Stabilizers --structural features of government spending and taxation that reduce fluctuations in disposable income, and the consumption, over the business cycle Discretionary Fiscal Policy --the deliberate manipulation of government purchases, taxation, and transfer payments to promote macroeconomic goals, such as full employment, price stability, and economic growth Simple Tax Multiplier --The ratio of a change in real GDP demanded to the initial change in autonomous net taxes that brought it about; the numerical value of the simple tax multiplier is -MPC/(1-MPC) Expansionary Fiscal Policy --An increase in government purchases, decrease in net taxes, or some combination of the two aimed at increasing aggregate demand enough to return the economy to its potential output, thereby reducing unemployment; policy used to close a contractionary gap Contractionary Fiscal Policy-- A decrease in government purchases, increase in net taxes, or some combination of the two aimed at reducing aggregate demand enough to return the economy to potential output without worsening inflation; policy used to close an expansionary gap Classical Economists-- A group of 18th and 19th century economists who believed that economic downturns were short-run phenomena that corrected themselves through natural market forces; thus, they believed the economy was self-correcting and needed no government intervention Employment Act of 1946 --Law that assigned to the government the responsibility for promoting full employment and price stability Permanent Income --Income that individuals except to receive on average over the long term Political Business Cycles --Economic fluctuations that result when discretionary policy is manipulated for political gain
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Chapter 13--Money and the Financial System Double Coincidence of Wants --Two traders are willing to exchange
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This note was uploaded on 04/13/2008 for the course ECON 0110 taught by Professor Kenkel during the Spring '08 term at Pittsburgh.

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VocabularyTerms3 - ECON 0110-Introduction to Macroeconomics...

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