Government and the Economy: Fiscal Policy

These programs of the federal government include Medicaid, Medicare, Social Security, Unemployment and Welfare Programs.

• Entitlement Programs
• Discretionary Spending
• Fiscal Policy
• Expansionary Program

The policy of a government toward the issues of how much taxes to charge citizens and how much money for the government to spend on programs and projects.  Changes in this policy can impact the overall economy based on the government controlling and distributing $3.5 trillion dollars each year!

• Fiscal
• Monetary
• State
• Federal

The total demand for final goods and services in an economy at a given time.

• Demand
• Aggregate Demand
• Supply
• Aggregate Supply

Policies involving increased government spending and reduced taxes to increase the level of aggregate demand.  

• Fiscal Policies
• Monetary Policies
• Expansionary Policy
• Contractionary Policy

Policies involving decreased government spending and increased taxes to decrease the level of aggregate demand.  

• Fiscal Policy
• Monetary Policy
• Expansionary Policy
• Contractionary Policy

Spending that is an optional part of fiscal policy, in contrast to entitlement programs for which funding is mandatory.

• Discretionary Spending

• Entitlement Spending

• Supply

• Aggregate Supply

This is a sustained increase in prices for “stuff.” It is measured as an annual percentage increase.

• Recession

• Inflation

• Aggregate Demand

• Demand

This is a period of temporary economic decline during which trade and industrial activity are reduced.

• Recession
• Inflation
• Aggregate Demand
• Demand

Refers to citizens responding to media reports, then contacting politicians and threatening/intimidating them into not carrying out a policy.

• Political Pressure

• Inflation

• Recession

• Regulations

These are rules used by federal agencies (run by executive) to protect consumers from harm or to protect businesses from unfair competition from bigger, stronger competitors.  

• Political Pressure
• Regulations
• Discretionary Spending
• Entitlements