Tutorial 5_2011_answers for students_

Tutorial 5_2011_answers for students_ - ECON1002...

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ECON1002 Introductory Macroeconomics, S1 2011 Tutorial Tasks 1 Key Concepts: Balanced budget multiplier, Automatic stabilisers, Government budget constraint, Stance of fiscal policy, Deficits and Public debt. R EVIEW OF C ONCEPTUAL U NDERSTANDING These are to be attempted before the tutorial. They will not normally be covered in the tutorial, maybe, except for a quick review, time permitting. The answers are typically found in the textbook and lecture notes. 1. What do you understand by the balanced budget multiplier? Why do taxes and government purchases have different impacts on the economy? Explain. 2. What are the limitations of fiscal policy as a stabilisation tool? How could these limitations be overcome, if any? 3. Why is the intergenerational consideration important for fiscal policy? What is the economic rationale for the ‘Future Fund’? 4. What is the relation between fiscal policy and the public debt? P
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This note was uploaded on 08/18/2011 for the course ECON 1002 taught by Professor Markmelatos during the Three '10 term at University of Sydney.

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Tutorial 5_2011_answers for students_ - ECON1002...

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