Fiscal policy

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current spending
govt spending on the day-to-day running of the public sector, inc. raw materials and wages of public sector workers
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capital spending
govt. spending to improve the productive capacity of the nation, inc. infrastructure, schools and hospitals
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transfer payments
govt. payments to individuals for which no service is given in return e.g. state benefits
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balanced budget
where govt. receipts equal govt. spending in a financial year
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budget deficit
where govt. spending exceeds govt. receipts in a financial year (PSNCR)
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budget surplus
where govt. receipts exceed govt. spending in a financial year (PSDR)
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demand-side fiscal policy
changes in the level or structure of govt spending and taxation aimed at influencing one or more of the components of AD
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expansionary fiscal policy
increasing levels of govt. spending relative to tax revenue, appropriate to stimulating AD during a downturn in economic activity
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contractionary fiscal policy
increasing levels of tax revenue relative to government spending, appropriate during a boom in economic activity
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supply-side fiscal policy
changes in the level or structure of govt spending and taxation designed to improve the supply side of the economy through influencing incentives to save, supply labour, to be entrepreneurial and promote investment (largely microeconomic in nature)
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unemployment trap
where individuals receive more in benefit payments than they would be paid if they were in a job
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discretionary fiscal policy
the deliberate manipulation of govt spending and taxation to influence the economy
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Other cards in this set

Card 2

Front

govt. spending to improve the productive capacity of the nation, inc. infrastructure, schools and hospitals

Back

capital spending

Card 3

Front

govt. payments to individuals for which no service is given in return e.g. state benefits

Back

Preview of the back of card 3

Card 4

Front

where govt. receipts equal govt. spending in a financial year

Back

Preview of the back of card 4

Card 5

Front

where govt. spending exceeds govt. receipts in a financial year (PSNCR)

Back

Preview of the back of card 5
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