Budgets
(a)Calculation of the BudgetThe Chancellor of the exchequer is the minister of finance in charge of thetreasury. The chancellor announces how much the government is going to spendover the next twelve months, sometime in February.The government states how it is going to raise the money to pay for itsexpenditure each spring in the Budget.Tax Collection Burden Advantage Disadvantages
Income Direct Progressive Fair Disincentive to work CertainEconomicalConvenient (PAYE) Disincentive to saveLarge Revenue Raiser VatIndirect Proportional Economical InflationaryConvenientAvoidable DiscouragesConsumptionDutiesIndirect Regressive Economical InflationaryConvenientAvoidable Regressive thereforeUnfair RatesDirect Regressive Economical RegressiveCertainUnavoidableCorporationDirect Regressive Economical Disincentive to InvestCertain
(b)Type of BudgetI.A reflationary or deficit budget where government spending is greater thangovernment income. Reflationary budget increase total demand within theeconomy.II.A deflationary or surplus budget where government income exceedsexpenditure and total demand is falling within the economy.III.A neutral or balanced budget where government income and spending are thesame and total demand in the economy remains constant.
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8. Budget
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| Upload Date: | 05/17/2009 |
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