4.5 Role of the state in the macroeconomy
This section builds on Theme 2 (section 2.6.2) in which the concepts of fiscal policy, taxes as a leakage from the circular flow, and direct and indirect taxes were introduced. Students are now required to consider the macroeconomic effects of changes in taxation more fully; reasons for changes in the size and composition of public expenditure and the significance of its level for the economy; and the significance of the state of public finances.
This section builds on Theme 2 (section 2.6.2) in which the concepts of fiscal policy, taxes as a leakage from the circular flow, and direct and indirect taxes were introduced. Students are now required to consider the macroeconomic effects of changes in taxation more fully; reasons for changes in the size and composition of public expenditure and the significance of its level for the economy; and the significance of the state of public finances.