9.1 Fiscal policy Flashcards

1
Q

What is fiscal policy?

A

using government spending and taxation to influence the demand side of an economy

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2
Q

What is fiscal policy?

A

using government spending and taxation to influence the demand side of an economy

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3
Q

What is a direct tax?

A

taxes imposed on an individual or property

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4
Q

What is an indirect tax?

A

taxes on a transaction or imposed on a producer

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5
Q

What is a hypothecated tax?

A

taxes raised for a specific purpose

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6
Q

What happens to supply when VAT is introduced?

A

The SRAS curve shifts left because firms cannot always full pass the increased VAT on to the consumer and this decreases profit margins. This then reduces the incentive to provide a good or service at any given price level.

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7
Q

What are examples of supply side fiscal policy?

A

Targeted government spending - infrastructure improvements
Tax incentives
Reduce direct taxation

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8
Q

What is national debt?

A

The amount of

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