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The tutor and student explored public sector finances, focusing on fiscal policy, automatic stabilizers, and discretionary policies. They differentiated between fiscal deficits and national debt, and analyzed structural vs. cyclical deficits, with the student participating in explaining concepts and viewing data from the World Bank.

The Tutor and Student explored the fundamental concepts of taxation, including its definition, importance, types (direct and indirect), and the characteristics of a good tax. They analyzed the impact of taxes on economic efficiency, using concepts like deadweight loss, and discussed progressive, proportional, and regressive tax systems. The session also covered the Laffer curve and the macroeconomic effects of tax changes.

The Tutor and Student engaged in a detailed discussion about the macroeconomic role of government, focusing on public expenditure. They covered the objectives of government spending, its types (capital expenditure, transfer payments), and its impact on aggregate demand, inflation, productivity, and living standards. The next session will focus on taxation.

The tutor and student reviewed Section 4.4 of the syllabus concerning the role and functions of financial markets. They discussed the economic definition of a market, the importance of financial institutions in facilitating savings and lending, and explored concepts like forward markets, equities, asymmetric information, externalities, and market bubbles. The student is preparing for final exams in May and June.