Government spending and Taxation
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- Created on: 19-05-16 13:47
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- Government Spending and Taxation
- How to finance it
- interest gained from loans
- Rent from public owned land/buildings
- privatising Gov owned firms
- Taxes
- Effects of Tax
- stagflation
- wage price spiral
- dependant on elasticity of demand in economy
- negative multiplier
- increase tax = less disposable income
- Effects of Tax
- how to spend it
- Social priorities
- education, healthcare etc
- size/age of population
- young = student loans
- old = pensions
- increasing population = higher spending
- redistribution of income
- level of poverty
- debt interest
- Social priorities
- Effects of spending
- opportunity cost
- multiplier, if Gov spending increases as should AD
- costs of correcting negative spending
- Gov failure
- crowing out
- spending high in one sector will crow out other (private & public
- Effects of Tax
- stagflation
- wage price spiral
- dependant on elasticity of demand in economy
- negative multiplier
- increase tax = less disposable income
- How to finance it
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