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Automatic Stabilizers
Factors without government interaction which automatically reduce the short-term business cycle fluctuations.
Contractionary Fiscal Policy
Fiscal policy aimed at reducing aggregate demand by decreasing government spending or increasing taxes.
Current Account
The current account is the sum of the balance of trade in goods and services, income and current transfers.
Expansionary Fiscal Policy
Fiscal policy aimed at increasing aggregate demand by increasing government spending and/or reducing (business and personal) taxes.
Fiscal Policy
Refers to the influence of government spending and taxation to impact the aggregate demand.
Keynesian Multiplier
The Keynesian multiplier is the proportional increase in real GDP that results from an initial injection into the economy.
Transfer payments
Transfer payments are redistributions of income by the government to individuals or households without any exchange of goods or services.