Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Government Spending $450 500 600 640 680 600 Tax Revenues A budget surplus occurred in $425 450 500 620 580 620 GDP $2,000 3,000 4,000 5,000 4,800 5,000

Answer the next question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Government Spending $450 500 600 640 680 600 Tax Revenues A budget surplus occurred in $425 450 500 620 580 620 GDP $2,000 3,000 4,000 5,000 4,800 5,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Read the following premise carefully and answer the questions specifically and in detail. "In the face of unstable economic growth due to a recession or accelerated inflation, the potential problems of high public debt include increased income inequality, reduced economic incentives, and crowding out private investment." 1. Explains in detail fiscal policy, its role and its effects on short- and long-term economic fluctuations. 2. Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy.
In year one government taxes are 590,000 and government spending is 600,000 in year two government taxes are 590,000 and government spending is 590,000 in year three government taxes are 630,000 and government spending is 600,000. What is the government deficit for year two and provide the size of the government debt or surplus at the end of all three year.
See the attached. Which answer is correct?
Question 1 Which of the following accurately describes the phenomenon of crowding out? O government borrowing pushes up interest rates, driving out private investment and consumption O government spending drive up the budget deficit O government spending causes more goods to be allocated to the public sector and fewer are available for the private sector O Increasing the proportion of public sector spending in the composition of GDP renders production less competitive and therefore less efficient.
4
2. If government expenditures are $100 and the average tax rate is 0.6, derive the equation for the budget line and draw the budget line. What is the real GDP when there is no deficit and no surplus?
1. Why is a $100 billion increase in government spending on goods and services more expansionary than a $100 billion decrease in taxes?
15. Which of the following is a congressional position or organization? the Department of the Treasury comptroller Budget Oversight Committee the United States Office of Management and Budget (OMB)
1. 2. 3. The working-age population in Concordia was estimated to be 6.5 million in a certain year. The country's labor department announced that the total number of unemployed people in the country had gone up to 460,000 during this year while, the total number of people out of the labor force decreased to 2,000,000. Oscar Lewis, a student of labor economics believes that the labor department data is flawed. The government of Concordia adopted expansionary fiscal policies in the last two years with the aim of increasing employment. However, the government has been unable to bring down the unemployment rate in the country. Which of the following, if true, best explains this outcome? OA The government implemented a generous welfare plan 3 years ago to support people who cannot find work. OB. The number of students who enroll for higher education is decreasing every year. Oc. During this period, the country's government reduced the limits on foreign direct investment in key sectors. OD.…
11
1. The following is information for the economy of Texas, where taxes are wholly autonomous: C = 40 + 0.8YD where YD = (Y – T) G = T = 360 I = 120 XN = 107 – 0.1Y a. What is the value of equilibrium income? b. At equilibrium, what is the amount of budget deficit or budget surplus? c. If government increased both its spending and taxes by $60, what would be the new equilibrium income?
An amendment to the Texas Constitution requires a balanced budget. This means that _____. A. any increase in government spending must be offset by a decrease in the total funds allocated to the General Revenue budget B. the legislature cannot approve a budget if it exceeds the projected revenues for the state by more than 30 percent C. the legislature cannot approve a budget if it exceeds the projected revenues for the state by more than 10 percent D. any increase in government spending must be offset by an increase in revenue and/or cuts in spending elsewhere in the budget