CHAPTER 11 SUMMARY

CHAPTER 11 SUMMARY - CHAPTER 11 SUMMARY 1 Fiscal policy...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 11 SUMMARY 1. Fiscal policy cosists of deliberate changes in government spending, taxes, or some combination of both to promote full employment, price-level stability, and economic growth. Fiscal policy requires increases in government spending, decreases in taxes, or both-a budget deficit- to increase aggregate demand and push an economy from a recession. Decreases in government spending, increases in taxes, or both-a budget surplus- are appropriate fiscal policy for dealing with demand-pull inflation. 2. Buily-In stability arises from net tax revenues, which vary directly with the level of GDP. During recession, the federal budget automatically moves toward a stabilitizing deficit; during expansion the budget automatically moves toward an anti-inflammatory surplus. Built in stability lessens but does not fully correct undesired changes in the real GDP. 3. the standardized budget measures the federal budget deficit or surplus that would occur if the economy operated at full employment throughout the year. Cyclical
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/12/2008 for the course ECO 1000C taught by Professor Lawrence during the Spring '08 term at St. Johns Duplicate.

Page1 / 2

CHAPTER 11 SUMMARY - CHAPTER 11 SUMMARY 1 Fiscal policy...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online