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active fiscal policy (H3, H5)<br />Frequently used discretionary fiscal policy. Using this, a government makes many changes in its spending and taxation, instead of relying on automatic stabilizers, to achieve a desired level of aggregate demand.
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prospect theory (D8)<br />An account of decision making under uncertainty. It states that the value of an alternative or option is the sum of the products of specified outcomes. Each product is calculated by multiplying the utility from x by the weight attached to the objective probability of obtaining x.<br /><em>See also:</em> expected utility <br /><em>Reference</em><br />Kahneman, D. and Tversky, A. (1979)<br />'Prospect theory. An analysis of decision-making under risk', Econometrica XX: 263-91.
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