Fiscal Policy

Question 1

Definition

Answer 1

Refers to gvt use spending and taxations to influence economic activity

Question 2

Budget

Answer 2

Surplus: tax revenue > gvt spending

Deficit: taxe revenu < gvt spending

Balanced: tax revenue = gvt spending

Question 3

Gvt décisions

Answer 3

Taxing = fiscalité
Spending = dépense

Expansion fiscal policy; increase gvt spending or decrease taxes, this increase the budget deficit and increase aggregate demand

Contractionary fiscal policy: contraire

Question 4

Keynesian economist

Answer 4

Politique fiscal discrétionnaire can stabilize economy, increasing aggregate demand pour combattre recession and decreasing aggregate demand pour combattre l’inflation

Question 5

Monetarist

Answer 5

Such effect are temporary and appropriate monetary will dampen/attenuer economic cycle

Question 6

Automatic stabilizers

Answer 6

Redistribuer les richesse, ne règle pas le
Problème, le stabilise

Question 7

Objectifs politique fiscal

Answer 7

• influence the level of economic activity and aggregate demand
• redistribuante wealth and incoming among segments of the population
• allocate resource among economic agent and sector dans l’économie

Question 8

Debt ratio

Answer 8

Aggregate debt/ gdp

Real interest rate gvt debt> gdp = debt ration increase

Real interest rate gvt debt < gdp = debt ratio decrease et c’est de qu’on veut