Term
Macroeconomics Debates:
1)Tax cuts, tax revenue and budget deficits |
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Definition
Deficit Solutions
Will tax cuts reduce? |
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Term
Macroeconomics Debates:
3)Government Spending or Tax Cuts to stimulate growth? |
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Definition
Tax rate multiplier
Government spending multiplier |
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Term
Macroeconomics Debates:
Size and Scope of Gov’t |
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Definition
| Liberal position? Conservative position? |
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Term
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Definition
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Term
Deficit Solutions
Will tax cuts reduce? |
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Definition
Yes argument: cut income taxes; more individuals work; tax base grows
Disagreement – how much more or will revenue decline
Tax revenue = avg. tax rate X tax base
Empirical issue – what actually happens? |
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Term
| Macroeconomics and Government |
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Definition
Economists disagree – surprise
Elasticity of investments = responsiveness of investments to change in interest rates. Empirical evidence – how much
Disagreement over role of government in economy |
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Term
| Elasticity of investments = |
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Definition
| responsiveness of investments to change in interest rates. Empirical evidence – how much |
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Term
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Definition
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Term
| Government spending multiplier – |
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Definition
| chg. in total spending / change in gov’t spending |
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Term
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Definition
| chg. in total spending / chg. in taxes |
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