Definition of terms Austerity measures In economics‚ austerity describes policies used by governments to reduce budget deficits during adverse economic conditions. These policies can include spending cuts‚ tax increases‚ or a mixture of the two. Austerity policies demonstrate governments’ liquidity to their creditors and credit rating agencies by bringing fiscal income closer to expenditure. European Central Bank (ECB) One of the seven institutions of the European Union (EU) listed in the Treaty
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rising public debt has been exercising a serious pressure on the micro-economic stability of the country which can’t be described in a word. To find out the disadvantages of public debt one need not to give a cat’s eye view on public debt of the country. Rather we can easily find out the disadvantages of public debt if we look to the present socio economic & political condition of our country. Public debt put an upward pressure on real interest rate crowding private investment out. High public debt
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The U.S. Deficit/Debt Problem: A Longer-Run Perspective Daniel L. Thornton The U.S. national debt now exceeds 100 percent of gross domestic product. Given that a significant amount of this debt is the result of governmental efforts to mitigate the effects of the financial crisis‚ the recession‚ and the anemic recovery‚ it is tempting to think that the debt problem is a recent phenomenon. This article shows that the United States was on a collision course with a major debt problem for nearly
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[pic] Study on government deficits and debts in India. How do government debt-deficit sustainability issues hinder India’s growth Abstract Emerging nation India has high hopes of becoming a developed nation. In recent time Indian economy is considered as the fastest growing economy hence there are certain drawbacks such as the government deficits‚ debts which hinder India from achieving their goal. Development of nation is based on several factors and its more important for every nation to encourage
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Budget Deficit For many decades‚ there has been a concern for the deficit within the United States. Many politicians‚ authors‚ newscasters‚ and citizens have expressed their distress in order to resolve or control the issue. Keynesian economic theory states that running a budget deficit is okay‚ as long as the deficit is not exorbitantly large and is not carried for a long period of time. Even though many experts agree with this notion‚ having a deficit at all is important to the present and
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Republic of the Philippines BULACAN STATE UNIVERSITY City of Malolos‚ Bulacan PHILIPPINE EXPENDITURE PATTERN A Report Submitted to DR. LUIS M. LANSANG Professor In partial fulfillment of the requirements for the course Public Fiscal Administration by: Ronald Reagan T. Alonzo MPA Student July 27‚ 2013 1st Trimester‚ AY 2013-2014 TABLE OF CONTENTS I. | Introduction ……………………………………………………………………… | 3 | II. | Objective of the Study …………………………………………………………… | 4 |
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Supplemental Unit 5: Fiscal Policy and Budget Deficits Fiscal and monetary policies are the two major tools available to policy makers to alter total demand‚ output‚ and employment. This feature will focus on fiscal policy‚ what it is and its potential and limitations as a tool with which to promote economic stability and strong growth. What is Fiscal Policy? When the supply of money is economic constant‚ government expenditures must be financed by either taxes or borrowing. Fiscal policy involves
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IMPACTS OF PUBLIC DEBTS ON THE ECONOMIC GROWTH Government debt is also known as public debt. It is the debt owed by a federal government to the internal or external sources. It is required when the stocks of government securities are insufficient to cover previous budget deficits. Budget deficits occur when the level of government expenditures exceeds its revenues. Based on macroeconomic theory‚ the level of government expenditure must be positive with the economic growth. The higher the expenditure
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Fiscal Policy Fiscal Policy is a macroeconomic (influencing the whole economy) policy that can influence resource allocation‚ redistribute income and reduce the fluctuations of the business cycle. Government’s policy What is the expected outcome for the 2012-13 Budget? Give a brief explanation. 1.5 billion dollar surplus; from deficit to surplus. They are using contraction Fiscal policy. What is the expected outcome for the 2012-13 Budget? Give a brief explanation. 1.5 billion dollar surplus;
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Evaluate the case for cutting public expenditure rather than raising taxes as a means of reducing fiscal deficits. [30] A fiscal deficit is when a government’s total expenditures exceed the tax revenues that it generates. A budget deficit can be cut by either reducing public expenditure or raising taxes. In this essay‚ I am going to analyse the benefits and costs of increasing tax rates to reduce fiscal deficits instead of cutting government expenditure. First of all‚ if the
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