Automatic stabilizers are built-in changes in government spending and taxation that dampen the business cycle by adjusting automatically with the economy's performance without additional legislative action.
The federal deficit (or surplus) refers to the shortfall (or surplus) resulting when the federal government spends more (or less) in a fiscal year than it receives in revenue. The deficit is financed by borrowing from the public via long and short-term debt instruments.
Fiscal policy involves the strategic use of government spending and taxation to influence a nation's macroeconomic conditions. It plays a crucial role in managing economic cycles by affecting demand, employment, inflation, and overall economic growth.
A fiscalist is an economist who believes that government intervention in the economy, primarily through changes in taxation and government spending, is essential for managing economic stability and growth.
An inflationary gap occurs when aggregate demand exceeds aggregate supply, causing price increases in a fully employed economy or production increases if the economy is not at full employment. This phenomenon is often attributed to government deficits and excess spending.
Investment expenditure, also known as capital expenditure, is the spending by businesses or governments on long-term assets to generate future growth.
Macroeconomic equilibrium is the point at which total aggregate income, or Gross Domestic Product (GDP), is produced when expected demand and supply are equated. This level of income consists of the planned spending of consumers, businesses, and government.
Macroeconomics is the branch of economics that studies an economy as a whole, focusing on large-scale factors such as national productivity and inflation, and how various sectors and factors interrelate to form a broader economic landscape.
