ECON 1100 Chapter Notes - Chapter 4: Fallacy, Government Budget Balance

• School: University of Guelph
• Department: Economics
• Course: ECON 1100
• Professor: Eveline Adomait

Document Summary

Macroeconomic policies- government actions designed to effect the performance of the economy as a whole. Monetary policy- refers in normal times to central bank management of interest rates to achieve macroeconomic objectives. Unconventional monetary policy- refers to measures such as loaning money to troubled financial institutions and buying long-term government debt, that central banks utilize in abnormal times to supplement conventional monetary policy. Fiscal policy- decisions that determine the government"s budget, including the amount and composition of government expenditures and government revenues. Government budget balance- the difference between government revenues and expenditures; it equals zero when revenues equal expenditures, and is negative when revenues fall short of expenditures. Government budget deficit- when government revenues fall short of expenditures; that is, the government budget balance is negative. Government budget surplus- when government revenues exceed expenditures; that is, the government budget balance is positive.