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

Normal probability distribution, Tennis-Warehouse recently conducted a stud...

Tennis-Warehouse recently conducted a study of long distance phone calls made by its employees. The study showed that the length of the calls has a mean of 3.2 minutes, a standard

the effect of on reserves and the monetary base, Many developing countries...

Many developing countries have suffered banking crises in which depositors lost part or all of their deposits (in some countries there is no deposit insurance). This type of crisis

World trade organization is a successor organization, The World Trade Organ...

The World Trade Organization is a successor organization to the A.United Nations. B.World Bank. C.International Court of Justice. D. GATT.

Effect of real wage in classical labour market, illustrate the effects of a...

illustrate the effects of a reeal wage existing in the labour market if it is perfectly competitive

Macroeconomics policy, explanations to the short-run fluctuation and pilicy...

explanations to the short-run fluctuation and pilicy prescriptions of the schools macroeconomics thought

Influence the risk accompanying long-term contracts, What impact will high ...

What impact will high and variable rates of inflation have on the economy? How will they influence the risk accompanying long-term contracts and related business decisions?

Macro, Difference between mec and mei.

Difference between mec and mei.

Trade cycle, discus the various measures that may be taken by a firm to cou...

discus the various measures that may be taken by a firm to counteract the evil effect of a trade cycle

Difference between accounting profit and economic profit, What is the diffe...

What is the difference between accounting profit and economic profit? Accounting Profit: The accounting profit of a business is the revenue of business minus the explicit

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