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Too often in recent history liberal government have been wrecked on rocks of loose fiscal policy. - Franklin D Roosevelt
FISCAL POLICY AND BUDGET AT A GLANCE Presented  by Group 6
Contents ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Public Finance As Over the Years  ,[object Object],[object Object],[object Object],[object Object],[object Object],Adam Smith Alfred Marshall David Ricardo Thomas Malthus J B Say Irving Fisher
Public Finance, Keynes and Beyond ,[object Object],[object Object],[object Object],[object Object]
Issues Related to Aggregate Demand Y O X Y1 Y2 Δ Y E G H R C + I C + I + G Z 45⁰ Slope is equal to MPC National Income C, I, G Multiplier =  1 1- MPC
INSTRUMENTS OF FISCAL POLICY ,[object Object],[object Object]
Instruments of Fiscal Policy in Inflation Y O X Y F Y 2 Δ Y E Inflationary Gap H C + I + G 1 # C + I + G 2 Z 45⁰ Expenditure  (C, I, G) National Income J C + I + G 1 Y 1 # Δ Y =  Δ G*  1  [1– MPC*(1-t)] Δ G
Crowding Out Effect (Recession) E3 E2 E1  I Y 2 Y 1 Y F 45  C+I 1 +G 2 C+I 2 +G 2 C+I 1 +G 1 45  C + I + G Y O X National Income Interest I 2 I 1 r 1 r 2 O Y X  I I I Investment
Instruments of Fiscal Policy to Cure Recession Y O X Y 1 Y F Δ Y E 1 Δ G H R C + I 1  + G 1 C + I 1  + G 2 45⁰ 45⁰ Expenditure GNP Gap Deflationary Gap National Income  Δ Y =  Δ G*  1  1 - MPC Y O X M s 1 M s 2 E 1 E 2 M d 1 M d 2 r Rate of interest Quantity of money
The Essence of Taxation T/ Y Y Income O % of income paid in taxes Progressive Proportional Regressive The Laffer Curve Tax Rate Tax Revenues R2 R1 50% 60% Maximum Tax Revenues
Government Expenditure
Measures of Deficit ,[object Object],[object Object],[object Object]
India’s Fiscal Deficit
BUDGET AT A GLANCE ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Dream Budget ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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Liberal governments wrecked by loose fiscal policies

  • 1. Too often in recent history liberal government have been wrecked on rocks of loose fiscal policy. - Franklin D Roosevelt
  • 2. FISCAL POLICY AND BUDGET AT A GLANCE Presented by Group 6
  • 3.
  • 4.
  • 5.
  • 6. Issues Related to Aggregate Demand Y O X Y1 Y2 Δ Y E G H R C + I C + I + G Z 45⁰ Slope is equal to MPC National Income C, I, G Multiplier = 1 1- MPC
  • 7.
  • 8. Instruments of Fiscal Policy in Inflation Y O X Y F Y 2 Δ Y E Inflationary Gap H C + I + G 1 # C + I + G 2 Z 45⁰ Expenditure (C, I, G) National Income J C + I + G 1 Y 1 # Δ Y = Δ G* 1 [1– MPC*(1-t)] Δ G
  • 9. Crowding Out Effect (Recession) E3 E2 E1  I Y 2 Y 1 Y F 45  C+I 1 +G 2 C+I 2 +G 2 C+I 1 +G 1 45  C + I + G Y O X National Income Interest I 2 I 1 r 1 r 2 O Y X  I I I Investment
  • 10. Instruments of Fiscal Policy to Cure Recession Y O X Y 1 Y F Δ Y E 1 Δ G H R C + I 1 + G 1 C + I 1 + G 2 45⁰ 45⁰ Expenditure GNP Gap Deflationary Gap National Income Δ Y = Δ G* 1 1 - MPC Y O X M s 1 M s 2 E 1 E 2 M d 1 M d 2 r Rate of interest Quantity of money
  • 11. The Essence of Taxation T/ Y Y Income O % of income paid in taxes Progressive Proportional Regressive The Laffer Curve Tax Rate Tax Revenues R2 R1 50% 60% Maximum Tax Revenues
  • 13.
  • 15.
  • 16.