Economics 1022A/B Lecture 9: Chapter 29, Fiscal policy

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Jeannie A Gillmore

Document Summary

Budget making: federal gov and parliament make fiscal policy, process begins with long, drawn-out consultations between the minister of finance and the. The federal budget: 3 main items on the federal budget are, revenues, outlays, budget balance, revenues, federal governments receipts, which were billion, theses revenues come from 4 sources, personal income taxes, corporate income taxes. If revenues exceed outlays, the gov has a budget surplus and budget deficit if o>r. If they are equal then the gov has a balanced budget. Indirect taxes decreased in the 90s because an old federal sales tax was replaced by gst or hst. Full employment and potential gdp: at full employment, the real wage rate adjusts to make the quantity of labour demanded equal the quantity supplied, potential gdp is the real gdp that the full employment quantity of labour produces. The effects of the income tax: the tax on labour income influences potential.