Economics - 0455 CIE

Fiscal Policy

Gbogbo ọrọ náà

Every year a government draws up a budget: a plan of what it will raise in taxes and what it will spend on schools, hospitals, defence and welfare. Whether that plan runs a deficit, a surplus or a balance shapes the whole economy, and using it deliberately to steer the economy is what economists call fiscal policy.

In this lesson you will define the government budget and its deficit and surplus, calculate the size of each, and explore the main areas of government spending, why governments spend on them and what effects that spending has. This is your first look at how governments manage the whole economy.

Ebumnobi

definitions of: - government budget - government budget deficit - government budget surplus
calculations of the size of a government budget deficit/surplus
main areas of government spending and the reasons for and effects of spending in these areas

Akọmọ Ojú-ẹkọ

The government is the single biggest player in most economies. How much it taxes and how much it spends affects growth, jobs, inflation and the gap between rich and poor. Fiscal policy, the use of government spending and taxation, is one of the two great levers (the other being monetary policy) that governments pull to manage the macroeconomy. Understanding the budget is the starting point.

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Ayẹwo Ẹkọ

Ekele diri gi maka imecha ihe karịrị na Fiscal Policy. Ugbu a na ị na-enyochakwa isi echiche na echiche ndị dị mkpa, ọ bụ oge iji nwalee ihe ị ma. Ngwa a na-enye ụdị ajụjụ ọmụmụ dị iche iche emebere iji kwado nghọta gị wee nyere gị aka ịmata otú ị ghọtara ihe ndị a kụziri.

Ị ga-ahụ ngwakọta nke ụdị ajụjụ dị iche iche, gụnyere ajụjụ chọrọ ịhọrọ otu n’ime ọtụtụ azịza, ajụjụ chọrọ mkpirisi azịza, na ajụjụ ede ede. A na-arụpụta ajụjụ ọ bụla nke ọma iji nwalee akụkụ dị iche iche nke ihe ọmụma gị na nkà nke ịtụgharị uche.

Jiri akụkụ a nke nyocha ka ohere iji kụziere ihe ị matara banyere isiokwu ahụ ma chọpụta ebe ọ bụla ị nwere ike ịchọ ọmụmụ ihe ọzọ. Ekwela ka nsogbu ọ bụla ị na-eche ihu mee ka ị daa mba; kama, lee ha anya dị ka ohere maka ịzụlite onwe gị na imeziwanye.

A government budget deficit occurs when: A. revenue equals spending B. spending exceeds revenue C. revenue exceeds spending D. there is no borrowing Answer: B
A government has revenue of $400bn and spending of $360bn. The budget is: A. in deficit of $40bn B. in surplus of $40bn C. balanced D. in deficit of $760bn Answer: B
Which area of government spending is mainly intended to redistribute income? A. defence B. welfare benefits C. debt interest D. infrastructure Answer: B
Fiscal policy refers to the use of: A. interest rates and the money supply B. government spending and taxation C. exchange rates D. trade barriers Answer: B
Education is often funded by the government because it is: A. a demerit good B. a merit good that is under-provided by the market C. a public good only D. a luxury good Answer: B