fiscal policy(government spending/taxation) is the use of government expenditure and revenue collection (taxation) to influence the economy.
Fiscal policy can be contrasted with the other main type of macroeconomic policy, monetary policy, which attempts to stabilize the economy by controlling interest rates and spending. The two main instruments of fiscal policy are government expenditure and taxation. Changes in the level and composition of taxation and government spending can impact the following variables in the economy:
Fiscal policy refers to the use of the government budget to influence economic activity. Sources of tax revenue
highway tolls, property taxes, sales taxes, user fees, income taxes and corporate taxes
A deficit is the amount by which a sum falls short of some reference amount.
Government spending> net tax revenue = Budget deficit
In economics, a deficit is a shortfall in revenue; in more specific cases it may refer to:
Surplus is when there is more supply than demand, as in extra resources.
Government spending< net tax revenue = budget surplus Economic surplus (also known as total welfare or Marshallian surplus after Alfred Marshall) refers to two related quantities. Consumer surplus or consumers' surplus is the monetary gain obtained by consumers because they are able to purchase a product for a price that is less than the highest price that they would be willing to pay. Producer surplus or producers' surplus is the amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for.
fiscal policy(government spending/taxation) is the use of government expenditure and revenue collection (taxation) to influence the economy.
Fiscal policy can be contrasted with the other main type of macroeconomic policy, monetary policy, which attempts to stabilize the economy by controlling interest rates and spending. The two main instruments of fiscal policy are government expenditure and taxation. Changes in the level and composition of taxation and government spending can impact the following variables in the economy:
Fiscal policy refers to the use of the government budget to influence economic activity.
Sources of tax revenue
highway tolls, property taxes, sales taxes, user fees, income taxes and corporate taxes
A deficit is the amount by which a sum falls short of some reference amount.
Government spending> net tax revenue = Budget deficit
In economics, a deficit is a shortfall in revenue; in more specific cases it may refer to:
Surplus is when there is more supply than demand, as in extra resources.
Government spending< net tax revenue = budget surplus
Economic surplus (also known as total welfare or Marshallian surplus after Alfred Marshall) refers to two related quantities. Consumer surplus or consumers' surplus is the monetary gain obtained by consumers because they are able to purchase a product for a price that is less than the highest price that they would be willing to pay. Producer surplus or producers' surplus is the amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for.
references:
http://en.wikipedia.org/wiki/Economic_surplus
http://en.wikipedia.org/wiki/Deficit
http://en.wikipedia.org/wiki/Surplus
http://en.wikipedia.org/wiki/Fiscal_policy