Econ Unit 3 Key Terms

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

• Revenue

• 1. Discretionary spending

• 1. Mandatory spending

• 1. Fiscal policy

1. When the government spends more money than it takes in during a budget cycle.

• 1. Budget deficit

• 1. Revenue

• 1. Discount rate

• 1. Federal funds rate

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

• 1. Fiscal policy

• 1. Keynesian economics

• 1. Monetary policy

• 1. Supply-side economics

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

• 1. Open market operations

• 1. Monetary policy

• 1. Expansionary policies

• 1. Contractionary policies

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

• Revenue

• 1. Discretionary spending

• 1. Mandatory spending

• 1. Fiscal policy

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

• 1. Federal funds rate

• 1. Required reserve ratio

• 1. Revenue

• 1. Discount rate

1. Fiscal policies intended to decrease output and reduce economic growth.

• 1. Monetary policy

• 1. Expansionary policies

• 1. Open market operations

• 1. Contractionary policies

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

• 1. Fiscal policy

• 1. Supply-side economics

• 1. Monetary policy

• 1. Keynesian economics

1. The interest rate banks charge each other for loans.

• 1. Federal funds rate

• 1. Required reserve ratio

• Revenue

• 1. Discount rate

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

• 1. Fiscal policy

• 1. Supply-side economics

• 1. Monetary policy

• 1. Keynesian economics