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EC251
Macroeconomics 2
| Question | Answer |
|---|---|
| Determinants of investments | Expectations, interest rates, technology innovation |
| Undesired equilibrium is caused by | Recessionary and inflationary gap |
| Recessionary gap | Amount to which desired spending @ full employment falls short of full employment output |
| Inflationary gap | The amount by which equilibrium GDP exceeds full-employment GDP |
| Inflationary gap causes | demand pull inflation to many dollars chasing too few goods that can also cause prices to increase. An increase in the price levels initiated by excessive aggregate demand |
| Cyclical unemployment | Unemployment attributed to a lack of job vacancies that is to inadequate aggregate demand |
| Equilibrium GDP | The value of total output produced at macro equilibrium AS/AD |
| Fiscal policy | The use of government taxes and spending to alter macroeconomic outcomes |
| Transfer payments | Payments to individuals for which no current good or services are exchanged such as welfare, social sec, retirement ect.. |
| Fiscal year | the 12 month period used for accounting porpuses that begins oct 1st for the federal government |
| Discretionary fiscal spending | Those elements of the federal budget not determined by past legislative or executive commitments |
| Deficit spending | The use of borrowed funds to finance gov spending that exceed tax revenues |
| Budget surplus | An excess of gov revenues more than gov spending in any given time period |
| Structural deficit | Federal revenues @ full employment minus expenditures at full employment |
Created by:
brsoul1
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