FULL-EMPLOYMENT BUDGET: A hypothetical federal budget that would exist if the economy were at full employment. Differences between the actual federal budget and the full-employment budget result from taxes and expenditures that depend on gross domestic product. The full-employment budget indicates whether any of the federal government's fiscal policy is over- or under-stimulating the economy given the current position in the business cycle. During a recession the federal deficit should be just enough to generate a balanced budget at full employment. The same result is desirable if we're running a surplus with inflation. If the full-employment budget is NOT balanced, however, then we're doing too much or too little by way of fiscal policy and changes are in order.

     See also | full employment | taxes | gross domestic product | fiscal policy | business cycle | federal deficit | recession | inflation | full-employment real production |

FULL-EMPLOYMENT BUDGET, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: February 8, 2023].

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The relative responsiveness of a change in one variable (call it B) to an infinitesimally small change in another variable (call it A). The notion of point elasticity typically comes into play when discussing the elasticity at a specific point on a curve.

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