Class Notes (839,315)
Canada (511,260)
Brock University (12,137)
Economics (200)
ECON 1P92 (65)
Lecture

chapter 22

8 Pages
222 Views

Department
Economics
Course Code
ECON 1P92
Professor
Marilyn Cottrell

This preview shows pages 1,2 and half of page 3. Sign up to view the full 8 pages of the document.
Description
February 1 2012 Chapter 22 Adding Government and Trade to the Simple Macro ModelIntroducing GovernmentGovernment is an important variable in the economyFiscal PolicyGovernment expenditures or purchasesTaxationGovernment SpendingG is a part of desired AE AECIGXIMTransfer payments ie pensionsNot government purchasesOnly a flow of funds from government to house holdAffects disposable income and household spendingTax Revenues Net Taxes TTotal tax revenue minus total transfer payments Tax rates are autonomous poly variables but revenues vary with GDPTtYWhere tmarginal propensity to tax Note t includes all taxes so when Y rises by 1 tax revenues rise by t x 1The Budget Balance TGG is autonomous o Beyond the system not dependentTax rates are induced o TG revenue minus expenditureIf TGbudget surplusIf TGbudget deficitAs Y increases T rises o Tax revenues rise o Transfers payments fallProvincial and Municipal GovernmentsG includes all levels of government in desired AE in public savingIn Canadacombined purchases of provincial and municipal governments is larger than federal government The Net Export Function Exports XAutonomous wrt Canadian National income o Dependent more on foreign income
More Less
Unlock Document

Only pages 1,2 and half of page 3 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit