EC140 Lecture Notes - Lecture 30: Output Gap, Business Cycle, Loanable Funds

• School: WLU
• Department: Economics
• Course: EC140
• Professor: All

Document Summary

Fiscal policy: the use of the federal budget to achieve macroeconomic objecives, such as full employment, sustained economic growth, and price level stability. Federal government outlays and revenues and total government outlays and revenues luctuate similarly, but total > federal so total outlays luctuate more. Provincial outlays/revenues vary a great deal across provinces. Ater a process of consultaions, the minister of finance presents a budget plan to parliament . Parliament debates the plan and enacts the laws necessary to implement it. Personal income taxes are the largest revenue source. Mildly progressive in canada, as those with high income pay larger proporion than those with payroll taxes, cpp contribuions, ei premiums low income increasing marginal tax rate as income increases, move to higher tax bracket. Payroll taxes are regressive: those with high income pay a smaller proporion of income as tax than those with low income due to caps on insurable/pensionable earnings.