Economic Policies and Concepts

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Contractionary Policies

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A tool used to reduce government spending or the rate of monetary expansion by a central bank to combat rising inflation.

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Fiscal Policy

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The use of government spending and taxation to influence the economy.

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Crowding-out Effect

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An economic theory that argues that rising public sector spending drives down or even eliminates private sector spending.

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Fiscal Year

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Spans 12 months and corresponds with a company's budgeting process and financial reporting periods.

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Appropriations Bill

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An authorization by the general assembly for an agency to spend a specified sum of money from the public funds.

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Expansionary Policies

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Economic policies aimed at increasing output and stimulating the economy, often through increased government spending or tax cuts.

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Monetary Policy

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The process by which a central bank manages the money supply and interest rates to achieve macroeconomic objectives.

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Inflation

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The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

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Deficit Spending

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When a government spends more money than it receives in revenue, leading to a budget deficit.

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Supply-Side Economics

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An economic theory that argues economic growth can be most effectively fostered by lowering taxes and decreasing regulation.