Defi cit reduction, often called an austerity program, is identifi ed as a major issue facing the developed world as of the writing of this chapter. Go to the most recent issue of Fiscal Reference Tables published by the federal Department of Finance ( www.fi n. gc.ca ). There should be a table entitled “General Government Financial Balances: National Accounts Basis.” This lists all government surpluses (defi cits are negative surpluses) by country in the G7. Nearby will be tables on outlays and revenue as a percent of GDP.

a. Has Canada reduced its budget defi cit as a percentage of GDP since 2009? In the last 3 years?

b. Has the United States reduced its budget defi cit as a percentage of GDP since 2009? In the last 3 years?

c. Which country has the smallest defi cit (or largest surplus) in the most recent year of data?

d. Find the country with the largest defi cit reduction in the last two years of data. There should be tables preceding the Financial Balances table that show both outlays and revenue as a percentage of GDP. What proportion of the largest defi cit reduction came from revenue increases? What proportion of defi cit reduction came from outlay reduction?

e. Use the data entitled Economic and Financial Indicators found in The Economist to fi nd the country with largest budget defi cit and largest budget surplus. In this list the budget defi cit is called the “Budget Balance.”