How did everyone go?

[theduck]

The way I read it they asked if the government aimed to balance the budget every year what would they do in a period of economic downturn? Not if they were trying to achieve the goal of budget balance.

[xXNovaxX]

i got d as well.

it does include the imputed value of owner occupied dwellings etc.

on the whole was pretty disappointed, had to rush short answers and in some cases found myself explaining irrelevant things or repeating myself.

darn eco!

Wait sorry, i cant rememebr the exact wording of the GDP question, but I put "D" as my answer....was "D" about housing/dwellings etc? DOES THAT MENA I GOT IT RIGHT !!! YAY.

[theduck]

yeah that was D

[xXNovaxX]

Hmm, that balanced budget one is weird. I did what Moshi did as well, tossed up between A and D, eventually settled for D, grr, it's not fair =(

99% sure they wont accept 2 answers, because I have seen exams were like 80% get one question wrong, and 20% get it right, but it still stays.

Grr. I hope its reduce spending, increase tax, because the way I read it, is that it said, if the Gov >>>ALWAYS<<< has to run a balanced budget,, what would it to in eco downturn, so i ignroed the downturn bit, and focussed on the keyword ALWAYS, but I understand everyone's opposing argument, it makes sense.

hmmmm

[Bronzey]

I'm fairly sure that's what it means. It's asking theoretically, if the government needed to run a balanced budget in a recession, what would they do.

The answer is to raise taxes and reduce spending, since the automatic stabilisers that kick in in a recession (i.e. lower tax receipts and higher spending on welfare) have already pushed the budget into deficit. The only way to get back to balance is to raise taxes and cut expenditure.

[spizaa #5]

yeah but whose gonna re-elect a govt that increases taxes in a recession? it wouldnt happen in the first place. i dont know, maybe im just a spastic and couldn't bust the question open and am just throwing wayward theories out there to semi-justify my answer lol.
my thinking was..in a downturn/recession..the balance would be -ve anyway
so to make it less -ve, they decrease both outlays and revenues (taxes and spending), but decrease spending more than taxes :S

[xXNovaxX]

^^^^ can I just ask, what does re-electing a Gov have antyhign to do with the question, this isn't national politics

Like, did that get stated in the question? coz I forgot.

[spizaa #5]

haha it has nothing to do with the question! as i said, trying to justify answer by any means possible

[Tobyy]

Guys i did that exact opposite question the day before the exam in my friends checkpoints book under fiscal policy,
the wording is exactly the same except it says in a time of economic boom.
I actually asked my teacher that question the day before the exam because i didnt get it, and she said because in a boom more people would have jobs and would have to pay income tax, the government recieves higher taxes, and to balance this they increase expenditure.
So from the exam questions point of veiw in a time of ecomomic downturn, the government would recieve less income tax, and they would decrease government expenditure inorder to balance this.
Hope that kinda answers your questions a bit

[xXNovaxX]

^^^omg I thought I saw this question somewhere !!!!!!!!!!!!!!!!!!!!!!!!!! ty ty ty.

so does that mean the answer ISN'T

increase tax and reduce spending? ARGH

[Tobyy]

yeah, the answer is decrease taxes and decrease gov. expenditure because the answer in the time of a boom is increased taxes and increased gov. expenditure.
its not that hard once you come to think of it, hey? lol

[theduck]

So from the exam questions point of veiw in a time of ecomomic downturn, the government would recieve less income tax, and they would decrease government expenditure inorder to balance this.
Hope that kinda answers your questions a bit

yeah, the answer is decrease taxes and decrease gov. expenditure because the answer in the time of a boom is increased taxes and increased gov. expenditure.
its not that hard once you come to think of it, hey? lol

Arn't you saying the first point that they would decrease spending in times of a downturn and then in the second saying they would increase spending?

[Tobyy]

Im saying in the exam ( a downturn ) the gov. recieves less taxes and decreases gov. expenditure

But in the question i did (boom), it was the complete opposite and the answer was increase txes and expenditure, if you get me

[spizaa #5]

i just had a look at my checkpoints toby and it said in a boom (question 61), they decrease taxes and increase spending to balance budget. so the opposite would hold true for a downturn

[xXNovaxX]

THANK YOU!

You made my day