xBookUtils.terms['fn_13_1'] = "In 2007, debt charges, the payment of interest on government debt, accounted for 8% of all spending by Canada’s three levels of government. About the same amount was spent on the protection of persons and property.";
xBookUtils.terms['fn_13_2'] = "This is done so that spending isn’t counted twice when GDP is determined using the expenditure approach. The estimated size of GDP should be a fair and balanced approximation of the amount of activity in the economy at one point in time. Counting spending amounts twice would certainly not be fair and would provide a distorted view of both the pace of economic activity and the percentage shares of C and G in GDP.";
xBookUtils.terms['fn_13_3'] = "Of course in the AD-AS model the aggregate price level is not fixed. In this framework, we can say that any change (shift) in AD translates perfectly to a change in real GDP given the positive slope of the SRAS curve. In the example given, the $50 billion increase in G raises AD by $100 billion, nominal GDP has risen by $100 billion, and real GDP rises, but by less than $100 billion, as the upward slope to the SRAS curve forces the aggregate price level up when the AD curve shifts right.";
xBookUtils.terms['fn_13_4'] = "In the case of a change in government spending on goods and services (G), since MPC is a positive fraction, the cumulative impact to GDP (i.e., ΔY) is equal to the sum, Therefore, which in the case where MPC = 0.5 gives a government spending multiplier of 2. In the case of a change in transfer payments, the sum is similar, but all the terms in the sum are multiplied by MPC since households save a portion of the increase in transfer payments; thus, the increase in household spending in the first round is equal to MPC ×(ΔTransfers), and so on. So, in this case, we get Therefore, which in the case where MPC = 0.5 gives a multiplier for changes in government transfers of only 1.";