| A | B |
|---|
| Fiscal Policy | Changes in government spending and tax collections designed to achieve a full-employment and noninflationary domestic output |
| Council of Economic Advisers (CEA) | A group of three persons that advises and assists the president of the United States on economic |
| expansionary fiscal policy | An increase in government purchases of goods and services, a decrease in net taxes, or some combination of the two |
| budget deficit | The amount by which the expenditures of the Federal Government exceed its revenues in any year |
| contractionary fiscal policy | A decrease in government purchases for goods and services, an increase in net taxes, or a combination of the two |
| budget surplus | The amount by which the revenues of the Federal Government exceed its expenditures in any year |
| built-in stabilizer | A mechanism that increases government's budget deficit during a recession and increases government' budget surplus during an expansion without any government intervention |
| progressive tax system | A tax whose average tax rate increases as the taxpayer's income increases and decreases as the tax payer's income decreases |
| proportional tax system | A tax whose average tax rate remains constant as the taxpayer's income increases or decreases |
| regressive tax system | A tax whose average tax rate decreases as the taxpayer's income increases and increases as the taxpayer's income decreases |
| standardized budget | A comparison of the government expenditures and tax collections that would occur if the economy operated at full employment throughout the year, the full employment budget |
| cyclical deficit | A federal budget deficit that is caused by a recession and consequent decline in tax revenues |
| political business cycle | The alleged tendency of Congress to destabilize the economy by reducing taxes and increasing government expenditures before elections and to raise taxes and lower expenditures after elections |
| crowding-out effect | A rise in interest rates and a resulting decrease in planned investment caused by the Federal government's increased borrowing to finance budget deficits and refinance debt. |
| public debt | The total amount owed by the Federal Government to the owners of government securities; equal to the sum of past government budget deficits minus government surpluses |
| U.S. securities | U.S Treasury bills, notes, and bonds used to finance budget deficits |
| external public debt | The portion of the public debt owed to foreign citizens, firms and institutions |
| public investments | Government expenditures on public capital and on human capital |
| stratergy | a brutal attack of the English language |
