Econ Unit 3: Key Terms

Government spending that is required by existing laws to spend on certain programs.

• Revenue

• Discretionary spending

• Mandatory spending

• Fiscal policy

When the government spends more money than it takes in.

• Budget deficit

• Revenue

• Discount rate

• Federal funds rate

A form of demand-side economics that encourages government action to increase or decrease demand and output.

• Fiscal policy

• Keynesian economics

• Monetary policy

• Supply-side economics

The buying and selling of government securities to alter the supply of money.

• Open market operations

• Monetary policy

• Expansionary policies

• Contractionary policies

Government spending determined by the President and Congress each year in the budget and appropriations process.

• Revenue

• Discretionary spending

• Mandatory spending

• Fiscal policy

Rate that the Federal Reserve charges for loans to commercial banks.

• Federal funds rate

• Required reserve ratio

• Revenue

• Discount rate

Fiscal policies intended to decrease output and reduce economic growth.

• Monetary policy

• Expansionary policies

• Open market operations

• Contractionary policies

The actions the Federal Reserve takes to influence the level of real GDP and the rate of inflation in the economy.

• Fiscal policy

• Supply-side economics

• Monetary policy

• Keynesian economics

The interest rate banks charge each other for loans.

• Federal funds rate

• Required reserve ratio

• Revenue

• Discount rate

The use of government spending and revenue collection to influence the economy.

• Fiscal policy

• Supply-side economics

• Monetary policy

• Keynesian economics