EC140 Study Guide - Final Guide: Output Gap, Aggregate Demand, Real Interest Rate
21
EC140 Full Course Notes
Verified Note
21 documents
Document Summary
Federal budget: annual statement of the federal government"s outlays and revenues. Fiscal policy: use of federal budget to achieve macroeconomic objectives maintain full employment, economic growth, and price level stability. Federal gov. and parliament makes fiscal policy minister of finance presents budget plan to parliament parliament debates plan and enacts laws necessary to implement it budgets may politically driven (not be interests of economy) Revenues come from: personal income taxes (largest revenue source), corporate income taxes, indirect taxes (hst), investment income. Outlays are: transfer payments (largest outlay expenditure; for unemployment, Welfare payments, farm subsidies), expenditure on g/s, debt interest. Government debt: total amount that gov. borrows; sum of past deficits past surpluses. Supply-side effects of fiscal policy: effects of fiscal policy on employment, potential. Income tax changes full employment and potential gdp introduces tax wedge. Taxes on consumption (hst) adds to tax wedge taxes raises prices paid.
