- Fiscal policy
Fiscal Policy
Count flow (spending)
The manipulation of government spending,taxation and government borrowing to influence the level of economic activity.
Healthcare
Subsidies
Police Force
Defense (military)
Universal credits
Infrastructure
Education- increase human capital of workers
Inflow(Taxation)
Corporation tax - 19% tax on profits that businesses make
Income tax - progressive tax because it takes more money from richer people.
V.A.T. - Its is the 20% sales tax/It is a regressive tax because it takes more money from people on low income.
sugar tax - tax on goods that contains sugar
The four Fiscal policy objectives
Surplus on the balance of payments (x-m)
Economic growth - An increase in the Real GDP(2%)
Low unemployment - An increase in standards of living/ increase in HDI
Stable inflation
Types of Fiscal Policy
Expansionary
Contractionary
Increase in taxes
Cutting government spending (NHS)
Being in a budget surplus
Decrease in V.A.T
Increase in exports - by devaluing the currency and peg it to Chinese yuan/ more money to the economy/increase in real GDP
Decrease in income tax
Raising government spending(subsidies)
Increase in budget deficit
Increasing spending on education - Decrease unemployment/Increase standard of living/Increase HDI/ Increases spending
Budget - A government document presenting the government's proposed revenues and spending for a final year.