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<strong>Federal Default Fee (FDF)</strong> – A loan program fee required by the Deficit Reduction Act of 2005 to offset the risk of default and its subsequent costs. All Stafford and PLUS Loans guaranteed on or after July 1, 2006 must be assessed a one percent default fee. The fee either must be deducted from the borrower' s loan proceeds at the time of disbursement or paid by a third party from other non-federal sources (such as by a lender or servicer). Also referred to as DFee.
compensatory finance (H5)<br />Expenditures by a government to offset LEAKAGES from the CIRCULAR FLOW of income. Thus, the impact of taxes, savings and imports which reduce the value of the MULTIPLIER for a national economy can be reduced by a government increasing its public expenditure and boosting exports through subsidizing export industries.
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supplier-induced demand (DO)<br />Demand for a good or service determined by the producer because of the consumer's ignorance of the need for it. The best example is medical services where consumers lack the knowledge required to diagnose a condition and prescribe a treatment.
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