ECON 1010 Lecture 8: lecture 8.doc
Document Summary
In 2007, the federal government spent 15 cents of each dollar canadians earned, and collected 16 cents of each dollar earned in taxes. Therefore, the government had planned a surplus of 1 cent on every dollar earned. For many years, the federal government had a large deficit and ran up debt. The federal budget is the annual statement of the federal government"s outlays and tax revenues. The federal budget has two purposes: to finance the activities of the federal government, to achieve macroeconomic objectives. Fiscal policy is the use of the federal budget to achieve macroeconomic objectives such as full employment, sustained economic growth, and price level stability. The federal government and parliament make fiscal policy. After a long and drawn out process of consultations, the minister of finance presents a budget plan to parliament. Parliament then debates the plan and enacts the laws that are necessary to implement it.
