1. 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.