1
What is the definition of fiscal policy?
Fiscal policy is the use of government spending and taxation to achieve specific economic and social objectives.
Fiscal Policy
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- Publıc Fınance (ENG)
2
What are the four main objectives of fiscal policy?
Price stability, full employment, economic growth and development, and equitable distribution of income and wealth.
3
What does expansionary fiscal policy aim to achieve?
It aims to increase economic activity by increasing government spending, decreasing taxes, or both.
4
What is contractionary fiscal policy?
A fiscal policy that decreases economic activity by reducing government spending, increasing taxes, or both.
5
What are the main instruments of fiscal policy?
Government expenditures, taxes, budget, and public debt.
6
What are the three types of government expenditures?
Current expenditures, capital expenditures, and transfer payments.
7
What is pump priming?
Government action to stimulate the economy by increasing expenditures and reducing taxes and interest rates.
8
What is compensatory spending?
Government spending to compensate for reduced private investment.
9
What is a budget surplus?
When government revenues exceed its expenditures.
10
What is the definition of public debt?
Borrowing by the government from individuals, companies, and banks to finance deficits or stabilize the economy.
11
What are automatic stabilisers?
They are automatic changes in government expenditures and tax revenues that stabilize the economy during fluctuations.
12
Name three common automatic stabilisers.
Progressive taxation, unemployment insurance payments, and agricultural support programmes.
13
What is fiscal drag?
A situation where rising tax revenues due to inflation reduce economic growth.
14
What is tax elasticity and why is it important?
It measures how tax revenue changes in response to GDP changes; it's important for fiscal stability.
15
What are the two types of discretionary fiscal policy?
Expansionary and contractionary fiscal policy.
16
What is the Olivera-Tanzi effect?
The loss in tax revenues due to the time gap between assessment and payment during inflation
17
What is stagflation?
A situation with high inflation, high unemployment, and slow economic growth.
18
What is tax-based incomes policy?
A policy using taxation to limit increases in prices and wages.
19
What are the four types of fiscal policy lags?
Recognition lag, decision lag, implementation lag, and impact lag.
20
What is crowding out?
When increased government spending reduces private investment.