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

Village panchyat project on agriculture, What are the topic in village panc...

What are the topic in village panchyat project on agriculture

State the important aspects of inflation data for sweden, Four aspects are ...

Four aspects are interesting when we look at inflation data for Sweden During 1800s, when Sweden was primarily an agricultural society, deflation where almost as common as

Determine the term- gdp per capita, Determine the term- GDP per capita ...

Determine the term- GDP per capita GDP, being a flow, isn't a measure of the total wealth of a country though a measure of the "income" of country during a certain period of ti

Reserves and a reserve requirement, If the Banking system has $500,000 in d...

If the Banking system has $500,000 in demand deposit liabilities, $125,000 in total reserves and a reserve requirement of 15%: What is the maximum amount by which the money supply

Meaning of convex indifference curves, Explain what convex indifference cur...

Explain what convex indifference curves means in terms of marginal utility. What properties must a utility function have in order to obtain convex indifference curves?

Control of patulin, Control: In apples molded by Penicillium expansum, mos...

Control: In apples molded by Penicillium expansum, most of the patulin is confined to the region of damaged tissue and simply removing the lesions reduces the toxin by 90%, but i

Kind of goods also the mrs, Suppose the utility function is given by: u(x,y...

Suppose the utility function is given by: u(x,y) = 3x+4y. What kind of goods are X and Y and what is the MRS?

Dynamic muliplier, distinguish between state and dynamic multiplier and ill...

distinguish between state and dynamic multiplier and illusrate balanc budget theorm in hindi

Who was the labour chancellor gordon brown, Who was the Labour Chancellor G...

Who was the Labour Chancellor Gordon Brown In the period between 1997 and 2006 the Labour Chancellor Gordon Brown was committed to self-imposed Sustainable Investment Rule that

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