Ever heard the term "cyclical budget deficit" but weren't sure what it meant, especially in the context of economic ups and downs? You're not alone. Governments sometimes spend more than they collect in revenue, creating a deficit. But there are two
Macroeconomics
Government Discretionary Spending Explained (Examples & Impact)
What's it: Government discretionary spending is an item in government spending where the allocation is at the government's discretion and is implemented through an appropriation bill. The government decides what to spend in the next fiscal year
Government Revenue: Funding Our Nation (Taxes, Impact & More)
What's it? Government revenue is money earned by the government for carrying out its activities. Taxes are the main source. The government also derives its revenue from non-tax sources, such as contributions from state-owned enterprises and proceeds
Government Capital Expenditures: Boosting Long-term Economic Growth – Examples, Impacts
Government capital expenditures are a critical driver of economic growth and development. Unlike day-to-day operational costs, this type of spending focuses on creating long-term assets that benefit the economy for years to come. Think of it as an
Government Current Expenditure: Examples and Impact on GDP
Government current expenditure is a crucial concept in understanding how governments allocate resources and how those decisions impact the national economy. It refers specifically to the money governments spend on their day-to-day operations and to
Transfer Payments: Understanding Safety Nets and Economic Impact – Types, Criticism
What's it: Transfer payments are payments by the government to the private sector without having to pay for the goods and services provided. These payments do not involve the goods and services exchanged and, therefore, are not counted
National Debt: Boom or Bust? Understanding the Impact
National debt: a weighty term often tossed around in economic news. But fear not! It simply refers to the money a government owes its creditors. This debt accumulates when a government spends more than it collects in tax revenue, resulting in a
Discretionary Fiscal Policy: The Government’s Tool to Steer the Economy – Types, Effects
Discretionary fiscal policy isn't about autopilot. It's a deliberate strategy governments use to influence the economy's direction. By adjusting spending and taxation, policymakers aim to achieve a stable economic climate, promoting growth and
Induced Tax: The Automatic Stabilizer You Didn’t Know About – Examples, Impacts
An induced tax automatically adjusts its bite based on the health of the economy. Unlike fixed taxes, induced taxes take a bigger chunk out of your income during economic booms and a smaller cut during downturns. This built-in flexibility makes
Balanced Budget: Pros and Cons (Debt, Growth, Multiplier Effect)
What's it: A balanced budget is when a government's spending equals its revenue. Therefore, there is no surplus or deficit. So, the government does not need to borrow to cover its expenses. So, there is no government increase. However, achieving
Budget Surplus: Effects on Debt, Economic Growth and Investment
What's it: A budget surplus is when the government plans to spend less than it earns. In other words, the government's budgeted revenue is greater than the government's spending. Surpluses may be an option when the economy is prospering, where
Taxes: Types, Impact on Economy (Growth, Jobs, Prices)
What's it: A tax is a mandatory levy by the government on an individual or other entity. There are many variations, including income tax, value-added tax, and capital gains tax. It has become the main source to cover government spending in