Chapter 14 Fiscal Policy
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Define ‘fiscal policy’ and ‘Budget’.
What are the different types of government revenue?
What are the major items of expenditure in the budget?
Explain what the budget outcome is.
What is the difference between a fiscal deficit and an underlying cash
deficit?
6. What is the government’s main fiscal policy aim?
7. Why are one-of transaction items removed from the Budget?
8. What is the difference between discretionary and non-discretionary
changes in fiscal policy?
9. Explain how ‘automatic stabilizers’ function. What are the two main
automatic stabilizers?
10.What is the role of the automatic stabilizer’s?
11.Describe the different impacts fiscal policy can have on economic growth.
12.How can fiscal policy changes influence the allocation of resources?
13.How can the government encourage merit goods and discourage demerit
goods?
14.Explain how fiscal policy can affect income distribution.
15.What impact can a budget outcome have on the CAD? (Explain the
crowding out effect).
16.Answer Q. 1-3 on pg. 287
17.Describe the process that the government takes in order to borrow from
the public sector. Outline the problems that could occur due to borrowing
from the public sector.
18.Outline other ways the government can finance a deficit.
19.Explain the factors that could influence the government’s decision about
how to finance a budget deficit.
20.What can the government do with excess funds when it has a surplus?
21.Explain what the ‘public sector underlying cash outcome’ is.
22.What is the difference between public sector debt and foreign debt?
23.Answer Q. 1-3 on pg. 293
24.Answer Q. 1-3 on pg. 299
25.Identify how the ageing of the population might affect fiscal policy.