Exam prep Flashcards
why is high costs bad
opp costs
how will it be funded:
High servicing = opp cost
spending cuts in future (health/education) –> burden poor
future tax rises likely (regressive)
High borrowing = crowding out
ricardian equivalence
if mf is limited is it worth it
G is xi and ai
Eval
Cost of borrowing
Forecast impact of i (real value of debt decrease)
Value judgements about how best to fund future public services
Which generations should bear the costs of doing it
Evaluation points
gov is never right
market is never right
just start complaining about anything for eval
definitions**
Elasticity of demand (PID=no change in Q) - eqns (change in qd/change in p)
BMs
Regressive
incentives + dependance
Imperfect info
trickle down effect (save, spend abroad, avoid tax)
inequality
zambia
fiscal drag
ricardian equivalence
policy myopia
political stability
moral hazard (for banks)
d/s side shocks
type and rate
causes
cost of borrowing
forecast impact of i (reduce real value of debt)
value judgements about how bets to use money
size of changes (cuts injections inflation etc)
size of output gap
size of multiplier
consumer and business confidence
state of gov finances
lr returns to gov
stage of economic cycle
laffer curve
automatic stabilisers
crowding in/out (recession has low risk of out)
stability
duration
anticipated
Negative externalities
MPS, MPT and MPM
regulatory capture
extra
Normative statements (opinions/value judgements)
weighing up points
assumptions made in theory that wont hold in real life
SR + consequences without considering LR (+ vice versa)
winners and losers
