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Macroeconomics Theory And Policy Hl Ahuja Pdf 235



 


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available at: euorpeanunion. org/ wps/ coursepacks/ EU_5-102/ ch15. pdf. Macroeconomics Chapter 15 Monetary and Fiscal Policy in the Open Economy The Reserve Bank and the National Government 299 14.1 Introduction : Key points in this chapter:  The modern system of government finance. • The role of government finance in the welfare of the general population. • The role of the government's key monetary policy instruments. • The role of public investment in sustaining long-run economic growth. The Fiscal Compact, the Stability and Growth Pact, and the Maastricht and Lisbon Treaties 3.1 Introduction In general terms:  The fiscal position of a government consists of  The  The  The public  The net  The net  The fiscal  The fiscal  The  The debt 3.2 The role of fiscal policy The government's fiscal policy (which is focused on net primary (or government) expenditures and hence the budget deficit) plays an important role in the welfare of the general population (see Box 14.1). However, fiscal policy has some important limitations as well. First, the budget deficit, as already mentioned, depends on the budget position of the government. The better the current budget position, the higher the budget deficit. Also, in most developed countries, public debt is considered to be a problem. The government's budget deficit is financed from two main sources:  The  The  The  The public  The public  The net  The net  The fiscal  The fiscal  The  The  The debt 4.2 Main areas of expenditure that affect the budget deficit These are the main areas of expenditure that affect the budget deficit and the current budget position. Table 15.1 illustrates their importance for the budget deficit. Government expenditure is separated into two categories:  Short-run expenditures (which can be used to improve the current budget position) and  Long-run expenditures (which are required to keep the economy moving). The former are the actual money spent on goods and services, while the latter include savings for future programmes and investments in human capital. Box 14.1 The role of the government in the welfare of the general population The most important

 

 

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Macroeconomics Theory And Policy Hl Ahuja Pdf 235
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