EC140 Lecture Notes - Potential Output, Jim Flaherty, Output Gap

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23 Aug 2013
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The government takes our money through taxes. In this section we study the topic of government spending/taxing/transferring, also known as. Just like any individual, the government budgets its money. Federal budget: the annual statement of the federal government"s outlays (spending) and tax revenues. To finance the activities of the federal government. Fiscal policy is the use of the federal budget to achieve macroeconomic objectives. Maintain full employment, economic growth, price level stability. Investment income: outlays are transfer payments (largest component, achieves income redistribution expenditure on goods and services, debt interest. The budget surplus in 2007 was billion. The budget deficit in 2011 was . 2 billion. Due to reduced tax revenues, and increases in spending. In 2012, a billion deficit is predicted. Budget balance usually presented as % of gdp. Shows spending relative all income earned in canada. Deficit increased and peaked at 6. 6% of gdp in 1985. During the 1990s, spending cuts eliminated the deficit.

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