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August 21, 2019, 06:49:44 am

Author Topic: Economics Questions Thread  (Read 80328 times)  Share 

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vox nihili

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Re: Economics Questions Thread
« Reply #750 on: July 16, 2019, 11:29:09 am »
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2. Explain why it can be argued that the underlying cash balance is considered a better indication of the budget position (4)
3. From the 2019 budget, outline an example of capital expenditure and current expenditure. (2)
5. With the use of data, explain how the budget outcomes can affect net government debt. (5)

You'd get a lot more from AN (and would more likely get help with your questions) if you tried to give them a shot first and let people correct that. We're here to help, not to do your homework for you :)
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Loren_T

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Re: Economics Questions Thread
« Reply #751 on: July 24, 2019, 06:01:54 pm »
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Hi
I was wondering if the 2019-2020 budget is expansionary or contractionary?
The fiscal policy is to achieve budget surpluses, on average, over the business cycle but the budget also has tax cuts and increased government spending
I think the budget is mainly expansionary as it encourages economic growth and a boom, then after the business cycle, the budget will become contractionary...
Is this right?

emilyygeorgexx

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Re: Economics Questions Thread
« Reply #752 on: July 24, 2019, 06:32:42 pm »
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Hi
I was wondering if the 2019-2020 budget is expansionary or contractionary?
The fiscal policy is to achieve budget surpluses, on average, over the business cycle but the budget also has tax cuts and increased government spending
I think the budget is mainly expansionary as it encourages economic growth and a boom, then after the business cycle, the budget will become contractionary...
Is this right?

To assess whether the budget currently holds an expansionary or contractionary stance you will have to look at the budget outcome from 2019-20 and compare it to 2018-19. You then need to see whether the budget surplus or deficit increased or decreased. That will then tell you whether it is expansionary or contractionary. You cannot determine whether it is expansionary or contractionary on mere factors such as economic growth.
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NomotivationF

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Re: Economics Questions Thread
« Reply #753 on: July 24, 2019, 07:05:30 pm »
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Hi
I was wondering if the 2019-2020 budget is expansionary or contractionary?
The fiscal policy is to achieve budget surpluses, on average, over the business cycle but the budget also has tax cuts and increased government spending
I think the budget is mainly expansionary as it encourages economic growth and a boom, then after the business cycle, the budget will become contractionary...
Is this right?

Hey Jessica, becuase the 2019/2020 is a surplus, it means that it is a mildly contractionary budget due to the fact there are more leakages compared to injections into the economy. You're right in saying that the budget has tax cuts and infrastructure spending, however, due to it still being a surplus budget we need to address it as being contractionary. However, the interesting part is, that the stance of the monetary policy is expansionary, which opposes the government's contractionary stance on the budget. I think it's best to ask your teacher about this question, but purely for our current study design, a budget that is in deficit is an expansionary budget, and a budget that is in surplus is a contractionary budget.
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Loren_T

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Re: Economics Questions Thread
« Reply #754 on: July 24, 2019, 08:35:47 pm »
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Thanks very much to you both  ;D ;D