chapter 4

corporate culture

Budget surplus

What is budget surplus?

Budget surplus is when taxation is greater than government spending

Why might government make a budget surplus?

according to AD=C+I+G+(X-M),

that I think , because the aggregate demand increase , consumption will increase, it may lead to

inflation and in order to deal with inflation, the government need make the aggregate go down,

therefor they increase the tax , the disposable income goes down, aggregate demand goes down,

and inflation decrease

BMW's Mini Cowley plant in Oxford(business)

http://news.bbc.co.uk/1/hi/business/7892538.stm
Yesterday my host father showed me a news which is the carmaker confirmed 850 job cuts at the BMW's Mini Cowley plant in Oxford .
why this happend?
I think , because of the recession , the aggregate demand goes down , and the consumption decrease too, that means people do not want buy new MINI cars,the demand of this car go down,
The income of the company go down,because of this , this company may face the problem which is cash flow, they do not have enough money to make cash flow work which means they may can not give their labour wages .Therefore, they need think about some ways to deal with this problem,
The way is redundancies and it can decrease the cash flow . In fact I think they can use some other ways , for example, decrease the supply or decrease the cost which means cut the sell price,, not a lot but a few, and also can add some benefits, like buy a car get something free. Also they can look for some investment , even though the chances are less than before, but they need try, because they have a famous brand of their products, some people will interested in.

Budget deficit (Economic)

What is budget deficit ?
Budget deficit is when the taxation is less than government spending.
Why might a government make a budget deficit?
Because it's budget deficit ,that's means taxation less than government spending.If the taxation less
than government spending ,the aggregate demand goes up.For example , now , all over the world
we face recession, consumption decrease,leads to the aggregate demand going down,
The government in order to deal with the problem uses budget deficit, they reduce the tax,
and may give the benefits to unemployment, and make the demand go up.So if the government
spending go up that's means consumption will go up and aggregate will increase too.

what is the effect of economic if consumption of alcohol goes down

Firstly what the government may to do for decrease the consumption of alcohol.
- legislation
The government can draft legislation , for example , just the people who over 20 years old can drink alcohol.and according to the date let me know a new licensing laws are due to come into effect on November 24, meaning that pubs and clubs will be allowed to serve drink for longer. I do not think this is a good law, opposite , I think this law encourage people to buy more drinks . So I think the government need cancel this law , and narrow the gap between 8:00 to 12:00,etc.
-advertisement
the government can make people know how bad to drink alcohol. And also third of men use alcohol to
Deal with stress , the government may make some ads for this type of people , like make ads talk about
How to deal with your stress without alcohol.etc.
-Increase the tax and interest rates
The government can increase the tax attend to increase the price of alcohol, if the price go up ,
people
Will not buy it like before, they may can not afford it , so the demand of it will get down. And about
Increase the interest rate , in older to decrease the investment of alcohol, because if the investment go
Down , the quantity of produce will decrease , and they company will sell less alcohol than before to
People. Etc.
-encourage the firm to produce some substitutes
If the government can encourage the firm to produce some substitutes , like juice or some thing else,
The consumer will buy another drink instead of alcohol.etc.
According to these ways , now we can talk about what is the effect of economic if consumption of
Alcohol go down.
if the consumption if alcohol go down that mean the government will loss a lot of income,
Because of the market of alcohol is huge, but at the moment the NHS, criminal , and the crush of
the
Public equipment will decrease , that's means the government spending will go down because of
those
Reasons,and I think it is more than government lost .and also if the consumption go down which
means
People drink less alcohol, the health of people will get better, and they will have longer life, because
Of that , the retire people will increase ,also unemployment people etc will increase , that's
means
The government will give more benefits to those people , and the government spending will

increase
Again.
At the end I think the government income is more lost . So I think the economic will growth.and

I hope
More and more people stop drinking alcohol ,espacially teenagers.

Two roles of Fiscal policy

There are two roles of fiscal policy
The first one is deal with the severe inflation and deflation that means
the government can use Fiscal policy to avoid the economic in the severe
and extended decline.and for deflation Fiscal policy ,
it can avoid the severe inflation.
The second role is to flat the economic fluctuation of the economic cycle.
when the economic get better, the government need increase the tax and make the
government spending down.It can bate the economic expand.