Economics 1022A/B Lecture Notes - Lecture 5: Potential Output, Business Cycle, Tax Rate

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ECON 1022A/B Full Course Notes
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ECON 1022A/B Full Course Notes
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Government budgets: federal budget states revenues and outlays for government of canada (provincial, budget purposes budget for provincial governments) Achieve macroeconomic policy objectives (fiscal policy: using taxes and government policy to achieve macroeconomic objectives. Triggered by the state of the economy: 2 multipliers. Federal government revenues: personal income taxes, indirect taxes, investment income. Federal government outlays: transfer payments, debt interest, expenditure on goods and services. Government budgets: revenues > outlays budget surplus, revenues < outlays budget deficit, revenues = outlays balanced budget, government debt, piigs. billion and increases the real gdp by billion. Cash payments from governments to households and firms. Like negative taxes: an increase in transfer payments work like a decrease in taxes. Autonomous transfer payments multiplier = mpc / 1 slope ae curve. Multipliers with induced taxes and trade: government expenditures multiplier. 1 / 1 (mpc (1-t) mpi) t= marginal tax rate: autonomous tax multiplier.

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