Tài liệu Aggregate demand, fiscal policy, and foreign trade

Some key terms
Fiscal policy
–the government’s decisions about spending and taxes
Stabilization policy
–government actions to try to keep output close to its potential level
Budget deficit
–the excess of government outlays over government receipts
National debt
–the stock of outstanding government debt

Government in the income-expenditure model
Direct taxes
–affect the slope of the consumption function
–and hence the slopeof the AD schedule.
Government expenditure affects the positionof the AD schedule