ECON 102 Chapter 22: Ch 22 Econ

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26 Jan 2018
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ECON 102 Full Course Notes
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ECON 102 Full Course Notes
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Ch 22: adding government and trade to the simple macro model. Fiscal policy: the use of the government"s tax and spending polices to achieve government objectives. Net tax revenue (t): total tax revenue minus transfer payments. Net tax rate (t): the increase in next tax revenue generated when national income rises by one dollar. Budget balance: the difference between total government revenue and total government expenditure. Budget surplus: any excess of current revenue over current expenditure. Budge deficit: any shortfall of current revenue below current expenditure. Marginal propensity to import (m): the increase in import expenditures induced by a increase in national income. Simple form for desired imports: im = my. Summary: all levels of government add directly to desired aggregate expenditure through their purchases of goods and services, g, government also collect tax revenue and make transfer payments. Net tax revenue are positively related to national income.

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