ECON 1010 Chapter Notes - Chapter 29: Government Budget Balance, Real Interest Rate, Nominal Interest Rate
Document Summary
Come from our sources: personal income taxes, largest source, paid by individuals on their income, corporate income taxes, smallest source of revenues, paid by companies on their profit. Indirect and other taxes: second biggest source, include taxes like gas tax, hst. Investment income: income earned from government enterprises and investments, outlays. If revenues < outlays, budget deficit: the budget in historical perspective, the government has historically rarely been in surplus, revenues are usually between 15 and 20% of gdp, while expenses are between. At full employment, real wage rate adjusts to make quantity of labour demand equal to quantity of labour supplied; without taxes. The labour equilibrium amount occurs at potential gdp, therefore real. Gdp equals potential gdp: effects of income tax. Tax on labour incoeme influences potential gdp and aggregate supply by changing the full employment quantit of labour.
