Tham khảo bài thuyết trình 'chapter: fiscal policy, and foreign trade', kinh tế - quản lý, kinh tế học phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | Chapter 22 Aggregate demand, fiscal policy, and foreign trade David Begg, Stanley Fischer and Rudiger Dornbusch, Economics, 6th Edition, McGraw-Hill, 2000 Power Point presentation by Peter Smith Some key terms Fiscal policy the government’s decisions about spending and taxes Stabilization policy government actions to try to keep output close to its potential level Budget deficit the excess of government outlays over government receipts National debt the stock of outstanding government debt 22. See the introduction to Chapter 22 in the main text. Government in the income-expenditure model Direct taxes affect the slope of the consumption function and hence the slope of the AD schedule. Government expenditure affects the position of the AD schedule 22. Fiscal policy? Income, output Aggregate demand 45o line AD0 Y0 But this ignores some important issues – prices, interest rates, and the need to fund the government spending. AD1 This seems to suggest that the government could . | Chapter 22 Aggregate demand, fiscal policy, and foreign trade David Begg, Stanley Fischer and Rudiger Dornbusch, Economics, 6th Edition, McGraw-Hill, 2000 Power Point presentation by Peter Smith Some key terms Fiscal policy the government’s decisions about spending and taxes Stabilization policy government actions to try to keep output close to its potential level Budget deficit the excess of government outlays over government receipts National debt the stock of outstanding government debt 22. See the introduction to Chapter 22 in the main text. Government in the income-expenditure model Direct taxes affect the slope of the consumption function and hence the slope of the AD schedule. Government expenditure affects the position of the AD schedule 22. Fiscal policy? Income, output Aggregate demand 45o line AD0 Y0 But this ignores some important issues – prices, interest rates, and the need to fund the government spending. AD1 This seems to suggest that the government could influence aggregate output in the economy by raising AD from AD0 to AD1, Y1 thus raising equilibrium output from Y0 to Y1. 22. but in surplus at high levels then the budget will be in deficit at low levels of income The government budget The budget deficit equals total government spending minus total tax revenue. If government spending is independent of income G G, NT Income, output but net taxes depend on income, The balanced budget multiplier states that an increase in government spending plus an equal increase in taxes leads to higher equilibrium output. Balanced budget 22. Deficits and the fiscal stance The size of the budget deficit is not a good measure of the government’s fiscal stance. The structural budget shows what the budget would have been if output had been at the full-employment level. The inflation-adjusted budget uses real not nominal interest rates to calculate government spending on debt interest. 22. Automatic stabilizers mechanisms in the economy that .
