Taxes and Government Spending

Taxes and Government Spending - TaxesandGovernmentSpending

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Taxes and Government Spending  Fiscal policy describes two governmental actions by the government. The first is  taxation. By levying taxes the government receives revenue from the populace. Taxes  come in many varieties and serve different specific purposes, but the key concept is that  taxation is a transfer of assets from the people to the government. The second action is  government spending. This may take the form of wages to government employees,  social security benefits, smooth roads, or fancy weapons. When the government  spends, it transfers assets from itself to the public (although in the case of weaponry, it  is not always so obvious that the population holds the assets). Since taxation and  government spending represent reversed asset flows, we can think of them as opposite  policies.  In the first macroeconomics we learned that output, or national income, can be 
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/13/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.

Page1 / 2

Taxes and Government Spending - TaxesandGovernmentSpending

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online