Biggest Budget in 30 years
The Chancellor announced some of the largest tax and spending changes ever experienced in peace time as it strives to bring down the massive government budget deficit. IB and new A2 students need to be asking themselves the following questions:
Does this large reduction in AD risk tipping the economy back into recession?
If so, why is the Chancellor doing it?
What side would a Keynesian economist take? And a monetarist? Why would they come to different conclusions?
Is this really a budget where the pain is spread across all income groups?
In what ways will the changes effect the incentives to work and save?
Read these two articles to help you (click on the link):
News Article from the BBC
Stephanie Flanders Blog
The latter article from the BBC's Stephanie Flanders is the latest in a series of excellent blog additions. Her blog is a must at the moment.
