Fiscal policy and supply side policies Flashcards
1
Q
Fiscal policy
A
Government economic policy that aims to achieve gov objectives through tax
2
Q
G=T
A
balance budget
3
Q
G>T
A
Budget deficit
4
Q
G<T
A
Budget surplus
5
Q
Budget deficit
A
When gov spending on the public sector is greater than gov revenue
6
Q
Definite financing
A
Purposeful budget deficit by increasing public spending to achieve full employment without excessive inflation
7
Q
Supply side fiscal policy
A
Increase the economies production of goods and services, the gov can encourage this by financing the education of unemployed to produce workers. This increases the factor of production labour and shifts the ppl curve to the right. The expansion created allows AS to increase.
