Econ 104 1st Edition Lecture 28 Outline of Last Lecture I. Characteristics of Bonds II. Government Multiplier III. Fiscal Policy Response to Recession IV. Fiscal Policy Response to InflationOutline of Current Lecture II. Tying up Loose Ends of the Course III. Government Debt and Deficit IV. Fiscal Policy and Great Recession Current LectureI. Fiscal Policy and the Great Recession a. Congress passed: the American Recovery and Reinvestment Act (ARRA) of 2009. ARRA:i. $840 billion package of spending increases and tax cuts ii. The largest fiscal policy action in US history iii. Approximately 2/3 of the stimulus increased government expenditures and ½ took the form of tax cuts II. The Government Debt and the Deficit a. Deficit: (T-G) < 0 b. Surplus: (T-G) > 0 c. Debt: add all surplus and deficit together and it is still less than 0 III. Composition of Federal Government Revenue 2012 a. Individual Income Taxes: 42.7% b. Social Insurance Taxes: 35% c. Corporate Incomes Taxes: 13.9% d. Other Taxes and other sources of revenue: 8.5%IV. Composition of Federal Government Expenditures, 2012 a. Transfer Payments: 46.4%b. Defense Spending: 21.7% c. Grants to state and local governments: 12.6% d. Interest Payments: 11.2% e. Other Expenditures: 8.2%These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a
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