Lecture 5 1.16.08

Lecture 5 1.16.08 - Fiscal Policy The government's attempt...

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Fiscal Policy – The government’s attempt to achieve macroeconomics objectives by setting and changing tax rates, making transfer payments, and purchasing goods and services. - Policy set by congress, other countries parliament, Government budget deficit – the deficit that arises when the government spends more than it collects in taxes - Tax revenue come from income(primary), ss, corporate, - State: property and sale dominant - Government usually borrow to appease this problem Government Budget Surplus – surplus arises when government collects more than it spends - Alberta has surplus due to royalties from oil in oil patches. Deficit spending and recession usually go hand in hand Economist are worried about 6-8 years US gov’t running huge deficits. We need to pay back some deficits. However, if we go into recession its hard. We have to increase tax during a time where the people don’t have money National Debt – The amount that the government owes to all the people who have made loans to cover the government’s deficit. Bond – the government promises to pay them back overtime, varying types of bonds to cover for deficit
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Lecture 5 1.16.08 - Fiscal Policy The government's attempt...

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