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  Linked activity: The Budget and forecasting

Part 1: Calculating and interpreting absolute, relative and percentage errors Refer to the data table in The Budget and forecasting data sheet. If possible, use spreadsheets to assist you with the following calculations. For both the Government revenue and spending calculate the: Absolute error Relative error Percentage error For both the Government revenue and spending determine if the estimate was an…

Definitions To help you understand the data in this sheet, the following definitions have been provided. The Budget Outlines what the government estimates it will receive in revenue and how much it expects to spend each year. Typically, the Budget is released by the government on the second Tuesday of May. Final Budget Outcome Shows how much the government actually spent or received rather than how much it expected to spend or receive, and…

Part 1: Budget forecasting errors over time Errors in Budget forecasting are often represented as a percentage of the total economic output of a country, or gross domestic product (GDP). This is a more realistic measure of the size of a Budget forecasting error as it is relative to the size of an economy. The errors in Budget forecasting represented as a percentage of GDP are shown in the table below. Errors for One-Year Forecasts, as a…

Part 1: Budget forecasting errors over time Errors in Budget forecasting are often represented as a percentage of the total economic output of a country, or gross domestic product (GDP). This is a more realistic measure of the size of a Budget forecasting error as it is relative to the size of an economy. The errors in Budget forecasting represented as a percentage of GDP are shown in the table below. Errors for One-Year Forecasts, as a…

Part 1: Calculating and interpreting absolute, relative and percentage errors Refer to the data table in The Budget and forecasting data sheet. If possible, use spreadsheets to assist you with the following calculations. For both the Government revenue and spending calculate the: Absolute error Relative error Percentage error For both the Government revenue and spending determine: If the estimate was an overestimate or an…

There are 3 main types of taxes in Australia: progressive, proportional and regressive.Progressive taxes: The higher the income, the higher the percentage of tax paid. Income tax for individuals in Australia is a progressive tax. Progressive income tax helps to alleviate poverty by taking a larger proportion (percentage) of income from the rich than from those on low incomes. The money raised in this way potentially becomes available to pay for…

‘Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn't ... pays it.’ – Albert EinsteinCompound interestCompound interest is calculated on the principal amount that you borrowed or invested and on the accumulated interest of previous periods – It is regarded as ‘interest on interest’.Compound interest is a way to grow your savings (or debt) faster. Figure 1 shows the difference compound interest…