Policy Debate2 - Contractionary Fiscal Policy - Policy...

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Policy Debates Terms and Formulae Terms Active Policy - Monetary policy and fiscal policy whereby the appropriate course of action is left to the discretion of policymakers rather than to the dictates of preset rules. Assets - Cash, stocks, bonds, and physical goods that are stores of wealth and value. Balance Sheet - An accounting tool where assets and liabilities are compared side by side. Borrowers - Individuals who take out loans from banks. Budget Deficit - When the amount of money spent by the government is greater than the amount of money collected by the government. Budget surplus - When the amount of money spent by the government is less than the amount of money collected by the government. Capital - Physical, human, and intellectual property used to increase productivity. Consumption - Money spent on goods and services by consumers.
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Unformatted text preview: Contractionary Fiscal Policy - Policy utilized by the government to slow the economy through increasing taxes and reducing government spending. Contractionary Monetary Policy - Policy utilized by the Fed to slow the economy through selling government bonds, increasing the reserve requirement, and increasing the federal funds interest rate. Crowding In - When government spending induces private investment. Crowding Out - When government spending reduces private investment. Currency - Money, either fiat or commodity, that is commonly used in an economy. Demand Deposits - Deposits made by in banks that can be withdrawn at any time--that is, on demand. Deposits - Money given to banks for safekeeping and to earn interest. Detection Lag - A difference in time between when an economic problem occurs and when it is noticed by economists....
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