Public finance

Julia Leno Dr. Connellan ? 6 AP World History 24 November 2012 Chapter 14-15 Outline Great Khan Ogodei told his Confucian advisor that he planned to turn the heavily populated North China Plain into a pasture for livestock. Yelu (advisor) argued that taxing the existing cities and villages would bring greater wealth but the Khan took the gentler approach although the tax system he instituted was not the fixed-rate method traditional to China but the oppressive tax farming already in use in the Il-khan empires in the Middle East. Benefits of oppressive tax farming: Trade Science Technology Transportation Communication The Mongols also forced exchange of experts and advisers between eastern and western Eurasia. This led to the rapid spread of information, ideas and skills.

The fiscal Cliff

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Economics

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Economy of the United States

United States public debt

Government

Government budget deficit

United States federal budget

Business

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American Economy

Welles Harris The Fiscal Cliff The fiscal cliff refers to an automatic $560 billion in tax increases and spending cuts that would go into effect, beginning in January 2013, to supposedly reduce the US budget deficit. Realistically, these cuts and tax increases would only reduce the national debt by a few percentage points. I believe the Simpson-Bowles Budget Alternative is currently the one of the better plans proffered for our country. This bipartisan plan, created by Alan Simpson, a former Republican senator, and Erskin Bowles, a Democrat who was previously the Chief of Staff under the Clinton administration, achieves debt reduction via tax to cuts ratio of 1:2.

Macroecon - building up to monetary policy

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Economics

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Money

Federal Reserve System

Monetary base

Business

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macro

macroeconomics

monetary policy

Definitions • MS • MB • Multiplier Tools • Open market operation (most used) • Discount loans/rate • Required reserve ratio Fiscal policy: the government affecting outcomes by using its budget Monetary policy: the government (fed) affecting outcomes via financial markets Money supply: quantity of money (M1) = currency + deposits Monetary base: Currency + reserves (except cash reserves) (M0) Reserves-> the banks’ account at the Fed (controlled by Feds) Imagine there’s no cash Imagine RRR = 10% Banks lives are simple- asset management Let’s say the Fed wants to engage in an open market purchase A L A L