Budgetary Policy

Question 1

budgetary policy definition

Answer 1

budgetary policy can be defined as the governments planned level and composition of receipts (or revenues) and outlays for the coming financial year. macroeconomic demand management policies aim to regulate the level of aggregate demand to stabilise the business cycle

Question 2

progressive tax definition

Answer 2

A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term “progressive” refers to the way the tax rate progresses from low to high

Question 3

regressive tax definition

Answer 3

the tax rate diminishes as the taxable amount increases. In other words, there is an inverse relationship between the tax rate and taxable income. The rate of taxation decreases as the income of taxpayers increases.

Question 4

direct tax and indirect taxes

Answer 4

a direct tax is paid directly by an individual or organisation to an imposing entity.
an indirect tax is a tax that indicates the price of a good so that consumers are actually paying the tax by paying more for the products.

Question 5

automatic and discretionary stabilisers definition

Answer 5

.automatic stabilisers are government outlays and tax revenues that automatically change over the course of the business cycle in such a way to stabilise an economic expansion or contraction
.are the deliberate use of changes in government outlays and/or taxes to alter aggregate demand in an attempt to stabilise the business cycle