4.2 Fiscal Policy & Budgetary Framework

Need to Know

At the end of this section the student should be able to:

identify the main sources of government revenue and expenditure; distinguish between the current and capital parts of the government accounts
discuss measures that a government can take to manage a budget deficit, surplus or balanced budget
differentiate between expansionary, neutral and contractionary fiscal policies and examine how the government could use these policies in an attempt to stabilise the business cycle
discuss the limitations of fiscal policy in stabilising business cycles
discuss how being a member of the EU and the Eurozone influences Ireland’s ability to implement fiscal policy
debate the purpose and impact of taxation on the economy as a whole, explaining how tax policy can be used to address inequality