Lecture Notes - Introduction

Lecture Notes - Introduction - produced in the economy....

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Introduction (chapter 1) 1. Stylized facts about government expenditures and revenues 1) Government expenditure accounts for 40% of GDP in recent years, up from 15% 70 years ago. 2) About 42% of the average Canadians earnings go to all levels of government. 3) International comparisons: G7 countries: Government expenditure as a percentage of GDP France 54% (highest) USA 38% (lowest) G7 Average 40% 2. The Allocation of Resources between Government and Private Use Trade-off between government and private goods and services Private Goods and Services Gov’t Goods and Services PPF: All combinations of private and public goods and services that can be
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Unformatted text preview: produced in the economy. Questions: Why do we demand government goods and services? Government provides individuals with items not available in markets Income distribution 1 Externalities Public goods How much government is enough? Trade-off between efficiency and equity Balance costs and benefits of government intervention 3. Topics Efficiency Market success Market failure: externalities Market failure: public goods Income distribution Income taxation 2...
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Lecture Notes - Introduction - produced in the economy....

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