Chapter 13

Question 1

The Federal budget

Answer 1

statement by GoC containing Outlays and Revenues

Question 2

Revenues (4)

Answer 2

-personal income taxes
-corporate income tax
-indirect & other taxes
-investment income

Question 3

outlays

Answer 3

-transfer payments
-expenditure of goods & services
-debt interest (domestic and international payments)

Question 4

transfer payments (5)

Answer 4

-households (pension)
-business (subsidies)
-provincial gov (education)
-local gov (grants)
-ROW (aid to other countries)

Question 5

Fiscal policy

Answer 5

use of federal budget to achieve goals like full employment & price level stability

Question 6

3 types of fiscal stimulus

Answer 6

automatic
discretionary
non-discretionary

Question 7

Automatic Fiscal Stimulus

Answer 7

-trigged by economic state with no action from gov
-automatic change in tax revenue (Y rises = Taxes revenue rises)
-automatic changes in outlays (expansion = transfer payments fall)
-Automatic stimulus in RECESSION: Gov revenue falls & outlays rise, budget makes stimulus to shrink recessionary gap

Question 8

Discretionary Fiscal Stimulus

Answer 8

expansionary, contractionary, discretionary (requires change in G, T or both G & T)

Question 9

Non-discretionary fiscal policy

Answer 9

decisions day of made by PM (ex. floods, fires, other disasters etc)