Goals of Macroeconomics: Manageable Government Debt and Deficit
Manageable government debt and deficit is the amount that a government spends more than it earns in revenue. Debt is the accumulated deficit over a number of years. It is achieved through a balance of government spending and taxation. Deficit- Revenue is less than spending Surplus- revenue is higher than spending Structural Debt- When a government spends more than it make in tax revenues even in good times or the peak phase of the business cycle. Cyclical Debt- When a government spends more than it makes in tax revenues, but only during a recession. They pay it back when times are good.
Trade offs in the Goals of Macroeconomics.
unemployment vs inflation
balancing the budget vs stimulating growth
growth vs higher consumption.
Dr. Stephanie Powers, "Goals"(Lecture, Donald School of Business, Red Deer AB, Winter 2012)
Manageable government debt and deficit is the amount that a government spends more than it earns in revenue. Debt is the accumulated deficit over a number of years. It is achieved through a balance of government spending and taxation.
Deficit- Revenue is less than spending
Surplus- revenue is higher than spending
Structural Debt- When a government spends more than it make in tax revenues even in good times or the peak phase of the business cycle.
Cyclical Debt- When a government spends more than it makes in tax revenues, but only during a recession. They pay it back when times are good.
Trade offs in the Goals of Macroeconomics.
Dr. Stephanie Powers, "Goals"(Lecture, Donald School of Business, Red Deer AB, Winter 2012)