EC250 Chapter Notes - Chapter 11: Monetary Policy, Supreme Headquarters Allied Powers Europe, European Debt Crisis

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7 Mar 2016
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11. 1 fiscal policy goals: government purchases of goods and services: Chapter 11: promote smooth economy, reduce cyclical fluctuations in output/unemployment, redistribute income, promote economic growth, government expenses on goods and services. 11. 2 fiscal policy tools: disposable income = earning income (taxes transfers, net income = profits (profit taxes + subsidies) Chapter 11: deficit = - surplus, primary surplus = revenue program spending, total spending > revenue, excludes interest on debt, only matters when country defaults on debt, has primary surplus doesn"t need to borrow abroad. 11. 4. 1 federal revenues/spending/deficits in canada: highest deficit was 8. 3 , 1984-85, goods and service tax (gst, federal government revenue, individual income taxes, corporate income taxes, social insurance contributions: Chapter 11: deterioration of fiscal position stopped deficit policy, reduction in debt interest payments, gov"t runs of surplus and debt decreases, reduction interest payments fast decline in debt, most revenue through taxes. Taxes households pay for their income earned.

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