Fiscal policy and budget, Macroeconomics

Assignment Help:

Fiscal policy is the program of government’s with respect to the amount and composition of (i) expenditure: the purchase of commodities and services, and spending in the form of subsidies, unemployment benefit, interest payments on debt,  pension and other payments, 

(ii) revenues, which is taxes and non-tax fees (such as license fees etc.) 

(iii) public debt: borrowing to cover excess  of  expenditure  over  revenues.  Borrowing can be taken from the three major sources: domestic banks, the general public, and the central bank (e.g. State Bank of India), and foreign creditors.

Budget Deficit, Budget Surplus and Balanced Budget can be understood as follows:

If i>ii: then the government is said to be running the fiscal or budget deficit and so the government should borrow (or raise debt) to cover deficit; if i

Fiscal deficits and debt are often reported as the ratio of GDP. Though, there is no theoretical benchmark for what constitutes the sustainable fiscal deficit or the public debt ratio, the Maastricht criteria (for the countries in the European Union) is a significant practical guide. It stipulates the fiscal deficit to GDP must be less than 3% while public debt to GDP must be less than 60%.


Related Discussions:- Fiscal policy and budget

Indifference curve., what is lemda in marginal utility. And how does it af...

what is lemda in marginal utility. And how does it affect the consumption

Consumption, (40 points) Consider two consumers, A and B. A and B both want...

(40 points) Consider two consumers, A and B. A and B both want perfect consumption smoothing (c = cf) and both have no current wealth. However, the two consumers have different inc

Population growth is greater than the growth of real output, If population ...

If population growth is greater than the growth of real output, A. real per capita Gross Domestic Product (GDP) growth will be less than the growth of real Gross Domestic Product

Monetary policy vs. fiscal policy, Monetary Policy Vs. Fiscal Policy Ac...

Monetary Policy Vs. Fiscal Policy According to monetarists, money is very important in determining the level of aggregate demand and that monetary policy is very potent. In con

Ratios, How to find fixed costs for capacity ratio calculating from annual ...

How to find fixed costs for capacity ratio calculating from annual report?

Government revenue, Government revenue, government spending and net exports...

Government revenue, government spending and net exports  G, NT and NX are exogenous variables in the classical model In the classical model (and

Point of service option, An HMO has a point of service option for its membe...

An HMO has a point of service option for its members, but will pay only 80 percent of approved charges. If a member goes out of network for a medical procedure with a charge of $20

Economies as a scope, If there are economies of scope and if the price for ...

If there are economies of scope and if the price for each product equals marginal cost, is it possible for a firm to cover all its costs? If the firm's average cost of production d

Fiscal, what is the supply side

what is the supply side

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd