ECO 100 u2013 WEEK 8 u2013 DISCUSSION.docx - ECO 100...

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ECO 100 – WEEK 8 – DISCUSSIONTHIS WEEK WERE LEARNING ABOUT FISCAL POLICY WHICH HAS TO DO WITH GOVERNMENT SPENDING AND TAXATION WITH REGARD TO THE PROBLEMS OF UNEMPLOYEMENT AND INFLATION. SO ON THE ONE HAND WE USE THIS FISCAL POLICY TO ADDRESS THOSE MACROECONOMIC PROLEMS. ON THE OTHER HAND WE ALWAYS NEED SOME TAX REVENUE TO RUN THE GOVT – HAVE TO PAY FOR NATIONAL DEFENSE AND SO ON. AND SO THAT’S ALWAYS AN ISSUE THAT WE HAVE TO ADDRESS TOO. WELL THE TWO MAJOR SCHOOLS OF THOUGHT IN MACROECONOMICS THE KEYNESIANS AND THE NEOCLASSICALS BOTH AGREE THAT TAX CUTS ENCOURAGE ECONOMIC EXPANSION, ECONOMIC GROWTH. BUT THE PROBLEM IS THAT IF YOU CUT TAXES PERHAPS YOURE GOING TO REDUCE TAX REVENUE. IT DEPENDS ON HOW MUCH GROWTH YOU HAVE. IF THE TAX CUTS PRODUCE ENOUGH ECONOMIC GROWTH WELL THEN YOU MIGHT END UP WITH MORE TAX REVENUE OVERALL.Exploring Tax Cuts, Jobs, and Tax RevenueThere has been discussion about whether the Tax Cuts and Jobs Act that took

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