Fiscal Policy (1 Viewer)

[passion89]

My school is extremely slow with Economics and have been told to summarise and learn Fiscal policy on our own just before our trials this week.

I was just wondering what it is that's needed (just a brief overview).

Thanks

 

[P_Dilemma]

Fiscal policy

Government's use of the budget. It is a DEMAND-SIDE macroeconomic policy ie. it influenced aggregate demand

Aims of Macroeconomic policy (use XGUIDE [Acknowledgements to my friend!])

X - External stability
G - Growth (economic growth, of course)
U - Unemployment
I - Inflation
D - Distribution of income
E - Environmental sustainability

Main things about budget:
1/ Taxation
2/ Expenditure
3/ Nature of budget outcome (surplus, deficit, balance)

-P_D

 

[passion89]

Awesome, thanks
Which policies would be supply-side instruments?
Am I justified in saying that microec'c policies are supply-side?

 

[Midnight Ramble]

Well...micro policies are Gov policies concerned with increasing the long run Aggregate supply curve and the acheiving higher levels of productivty and international competitiveness. Soooo yes they are supply side policies because they aim to get the economy to full employment by way of micro economic reform.

I've got my trial tommorow but we hadn't finshed topic 4 so i oi dont really need to know that ahh wells. hope it helps you tho =)

 

[gnrlies]

use XGUIDE [Acknowledgements to my friend!

You mean acknowledgements leading edge education!

Fiscal policy is used as a shift variable in the keynesian model of aggregate demand.

Fiscal policy involves taxation and government spending.

If AD = C+I+G+X-M then fiscal policy can work by doing two of the following things:

changes in government spending:

AD = C+I+(G+i)+X-M.... As government spending changes by an amount i, AD will increase or decrease by an equal amount (assuming taxation remains unchanged)

changes in taxation:

It impacts on consumption indirectly:

C = MPC x (Y-T)....

Where MPC = marginal propensity to consumer (aggregated economy wide)
Y = Income
T = taxation
(Y-T) = disposable income
Any change in T will directly influence Agg'd howevor not by an equal amount as the MPC is between 0 and 1.

So this is how fiscal policy works. It takes money off people who may otherwise save, and spends it.

Another way fiscal policy works is through the use of deficit budgeting. This is where a government will actuall spend more than it collects through taxation which of course will have a positive effect on growth.

There is really a lot to say about this stuff. Its impossible for me to continue, so if you want me to then just reply.

 

[drewgcn]

Look up the boredofstudies biki. It is really useful on Fiscal Policy.

 

[wce06]

Well...micro policies are Gov policies concerned with increasing the long run Aggregate supply curve and the acheiving higher levels of productivty and international competitiveness. Soooo yes they are supply side policies because they aim to get the economy to full employment by way of micro economic reform.

I've got my trial tommorow but we hadn't finshed topic 4 so i oi dont really need to know that ahh wells. hope it helps you tho =)

chris? if not, who is this canberran?

 

[denise_]

My school is extremely slow with Economics and have been told to summarise and learn Fiscal policy on our own just before our trials this week.

I was just wondering what it is that's needed (just a brief overview).

Thanks

don't worry passion, we up to fiscal too =/ its extremely slow, but teacher does not realise this and thinks we're going at a lightspeed :burn:

 

[lil_georgie_gal]

Yea dont worry we flciked through this whole section so we could get it done b4 the trials and ended up learning the entire topic 4 on our own, we didnt even do monetary in class but luckily we'd done it in depth in prelim so wasnt too bad...

I think these teachers shouldve planned better instead of rushing at the end or just scheduled to do some stuff after the trials

 

[lilkiwicutie89]

we actually never learnt much of fiscal policy. My techer made it a 30% assessment, in year 11 and 12.

Did you guys learn to put keynesian economics in fiscal and monetary?


Cheers.

 

[licia101]

wow you haven't finished. Our teacher had us finished all 4 topics by the end of term two and now we are revising everything and doing 2 practice essays a week.

In saying that she is an absolute nazi and half the class need all the help they can get but i would be so nervous if we hadn't finished