revision questions chapter 29 pt2 Flashcards
Which of the following is NOT a source of revenue for the UK government?
transfer paymenets
An example of an automatic fiscal policy stabilizer is when
tax revenues decrease as real GDP decreases.
The difference between the government debt and the budget deficit is
the budget deficit shows the annual discrepancy between government outlays and tax revenue and the government debt shows the accumulated balance of past government debts.
The government’s budget deficit or surplus equals the
total tax revenue - total outlays.
Economic data for a mythical economy in the years 2000-2004 are summarized in the figure above. Assume that the spending formulas and tax schedules are identical for all years. When the economy is above full employment, the government has a
budget surplus. (when govs revenue exceeds expenditure)
A cyclical surplus is a
government budget surplus only because real GDP is greater than potential GDP.
The government expenditures multiplier is the change in
equilibrium expenditure divided by the change in government expenditures.
Which of the following is NOT a government outlay item?
Purchases of foreign bonds.