文档介绍：CHAPTER 04
FISCAL POLICY
Slide 1
What You Will Learn in this Chapter:
What fiscal policy is and why it is an important tool in managing economic fluctuations
Which policies constitute an expansionary fiscal policy and which constitute a contractionary fiscal policy
Why fiscal policy has a multiplier effect and how this effect is influenced by automatic stabilizers
How to measure the government budget balance and how it is affected by economic fluctuations
Why a large public debt may be a cause for concern
Why implicit liabilities of the government are also a cause for concern
2
Fiscal Policy: The Basics
3
Sources of Tax Revenue in Canada, 2004
4
Government Spending in the Canada, 2004
Social insurance programs are government programs intended to protect families against economic hardship.
5
The Government Budget and Total Spending
Fiscal policy is the use of taxes, government transfers, or government purchases of goods and services to shift the aggregate demand curve
6
Expansionary and Contractionary Fiscal Policy
Expansionary Fiscal Policy Can Close a Recessionary Gap
Expansionary fiscal policy increases aggregate demand.
Recessionary gap
7
Expansionary and Contractionary Fiscal Policy
Contractionary Fiscal Policy Can Eliminate an Inflationary Gap
Contractionary fiscal policy decreases aggregate demand.
Inflationary gap
8
Lags in Fiscal Policy
In the case of fiscal policy, there is an important reason for caution: there are significant lags in its use
Realize the recessionary/inflationary gap by collecting and analyzing economic data takes time
Government develops an action plan takes time
Implementation of the action plan takes time
9
Fiscal Policy and the Multiplier
Fiscal policy has a multiplier effect on the economy
Expansionary fiscal policy leads to an increase in real GDP larger than the initial rise in aggregate spending caused by the policy
Conversely, contractionary fiscal policy leads to a fall in real GDP larger than t