Chapter 5 Government Macro Intervention Vocabulary Quiz

The use of taxation and government spending to influence aggregate demand

• Discretionary Fiscal Policy
• Automatic Stablizers
• Fiscal Policy
• Budget

Changes in government spending and taxation that occur to reduce flucuations in aggregate demand without any alteration in government policy.

• Discretionary Fiscal Policy
• Automatic Stablizers
• Fiscal Policy
• Budget

An annual statement in which the government outlines plans for its spending and tax revenue.

• Discretionary Fiscal Policy
• Automatic Stablizers
• Fiscal Policy
• Budget

Deliberate changes in government spending and taxation.

• Discretionary Fiscal Policy
• Automatic Stablizers
• Fiscal Policy
• Budget

Policy measures designed to reduce imports and increase exports by reducing demand.

• Cyclical budget deficit
• Structural budget deficit
• Expenditure Switching Policy
• Expenditure Dampening or Reducing Policy

A budget deficit caused by changes in economic activity.

• Cyclical budget deficit
• Structural budget deficit
• Expenditure Switching Policy
• Expenditure Dampening or Reducing Policy

Policy measures designed to encourage people to switch from buying foreign-produced products to buying domestically produced products.

• Cyclical budget deficit
• Structural budget deficit
• Expenditure Switching Policy
• Expenditure Dampening or Reducing Policy

A budget deficit caused by an imbalance between government spending and taxation.

• Cyclical budget deficit
• Structural budget deficit
• Expenditure Switching Policy
• Expenditure Dampening or Reducing Policy

The use of interest rates, direct control of the money supply and the exchange rate to influence aggregate demand.

• Money Supply
• Interest Rate
• Monetary Policy
• Supply Side Policy

Measures designed to increase aggregate supply.

• Money Supply
• Interest Rate
• Monetary Policy
• Supply Side Policy