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9.1 a) major roles of gov
b) major effects of i) gov spending ii) gov…
9.1 a) major roles of gov
b) major effects of i) gov spending ii) gov taxation
c) diff between expansionary and contractionary fiscal policy
d) diff bet progressive, proportional and regressive taxation
e) what is a good tax system
f)diff between gov exp and gov rev
a)
gov - economic policy maker, setting macroeconomic objective to economic growth, employment and economic stability
roles:
- stabilisation - the changing of economic policies by gov to support economic growth (decisions ab spending and taxes to smooth out fluctuations) - use of fiscal policy
- allocation - regulating aspects of private business ex. promoting fair trade and efficiency in production
3. distribution - provision of public goods and distribution thru involvment of production of gds/services provided by public sector
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b)
i) gov spending effects
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public admin, public order and national security
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ii) gov tax effects
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- discretionary fiscal policy - actions representing changes in fiscal policy by policy makers - used to manage AD levels
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- automatic stabilizers - economic policies to mitigate fluctuation in GDP w/o additional gov action
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f)
gov exp - distribution and use of funds gov finance has raised to meet needs of econ construction and other causes
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expansionary fiscal policy
contractionary fiscal policy
provision of public and merit goods
subsidies
capital formation