Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
discretionary spending mandatory spending discretionary fiscal policy expansionary fiscal policy contractionary fiscal policy supply- Laffer curve automatic stabilizers information lag recognition lag decision lag implementation lag public choice theory deficit surplus national debt public debt annually balanced budget cyclically balanced budget functional finance government budget constraint internally held debt externally held debt crowding- fiscal sustainability | The total debt issued by the U.S. Treasury, which represents the total accumulation of past deficits less surpluses. A portion of this debt is held by other government agencies, and the rest is held by the public. It is also referred to as the gross federal debt. Policies that involve adjusting government spending and tax policies with the express short- The amount by which annual tax revenues exceed government expenditures. Public debt owned by domestic banks, corporations, mutual funds, pension plans, and individuals. Policies that increase aggregate demand to expand output in an economy. These include increasing government spending, increasing transfer payments, and/or decreasing taxes. The time policymakers must wait for economic data to be collected, processed, and reported. Most macroeconomic data are not available until at least one quarter (three months) after the fact. A measure of the present value of all projected future revenues compared to the present value of projected future spending. Spending authorized by permanent laws that does not go through the same appropriations process as discretionary spending. Mandatory spending includes Social Security, Medicare, and interest on the national debt. Expenditures and taxes would have to be equal each year. The time it takes for policymakers to confirm that the economy is in a recession or a recovery. Short- The time it takes Congress and the administration to decide on a policy once a problem is recognized. Policies that decrease aggregate demand to contract output in an economy. These include reducing government spending, reducing transfer payments, and/or raising taxes. The government budget is limited by the fact that G − T = ΔM + ΔB + ΔA. When deficit spending requires the government to borrow, interest rates are driven up, reducing consumer spending and business investment. The portion of the national debt that is held by the public, including individuals, companies, pension funds, along with foreign entities and foreign governments. This debt is also referred to as net debt or federal debt held by the public. Policies that focus on shifting the long- Public debt held by foreigners, including foreign industries, banks, and governments. Tax revenues and transfer payments automatically expand or contract in ways that reduce the intensity of business fluctuations without any overt action by Congress or other policymakers. A curve that shows a hypothetical relationship between income tax rates and tax revenues. As tax rates rise from zero, revenues rise, reach a maximum, then decline until revenues reach zero again at a 100% tax rate. The economic analysis of public and political decision making, looking at issues such as voting, the impact of election incentives on politicians, the influence of special interest groups, and rent- The part of the budget that works its way through the appropriations process of Congress each year and includes national defense, transportation, science, environment, and income security. An approach that focuses on fostering economic growth and stable prices, while keeping the economy as close as possible to full employment. The time required to turn fiscal policy into law and eventually have an impact on the economy. Balancing the budget over the course of the business cycle by restricting spending or raising taxes when the economy is booming and using these surpluses to offset the deficits that occur during recessions. The amount by which annual government expenditures exceed tax revenues. |