Fiscal Policy Vocabulary

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• Fiscal Policy Vocabulary

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Fiscal Policy

• Changes government makes in spending or taxation
  to achieve particular economic goals.

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Expansionary Fiscal Policy

• An increase in government spending or a reduction
  in taxes.

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Contractionary Fiscal Policy

• A decrease in government spending or an increase
  in taxes.

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Crowding Out

• Situation in which increase in government
  spending leads to a reduction in private spending.

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Crowding In

• Situation in which decreases in government
  spending leads to an increase in private spending

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Aggregate Demand Curve

• Shows the quantity of goods and services buyers
  are willing and able to buy at different price
  levels. Same as demand in microeconomics, but
  takes in whole picture.

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Aggregate Supply Curve

• Shows the quantity of goods and services
  producers are willing and able to supply at
  different price levels. Same as supply in
  microeconomics, but takes in whole picture.