Macroeconomics

Borrowing constraint:

A restriction on the

amount a person can borrow from financial institu-

tions, limiting that person’s ability to spend his or her

future income today; also called a liquidity  constraint.

Budget constraint:

The limit that income places

on expenditure. (Cf. intertemporal budget constraint.)

Budget deficit:

A shortfall of receipts from

expenditure.

Budget surplus:

An excess of receipts over

expenditure.

Business cycle:

Economy-wide fluctuations in

output, incomes, and employment.

Business fixed investment:

Equipment and struc-

tures that businesses buy for use in future production.

Capital:

1. The stock of equipment and structures

used in production. 2. The funds to finance the accu-

mulation of equipment and structures.