projected future expenditures on entititlemt programs such as social security and medicare are expected to lead toincreasingly large federal budget deficits in furture decades. factors behind this trend include

Demographic Shifts: As populations age, there are fewer working-age individuals contributing to…

Answered: projected future expenditures on…

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 1DQ

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Similar questions

Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?
"Define in a formula, the federal budget deficit." please with explanation !! thank you !
EXPANSIONARY FISCAL POLICY 20% GOVERNMENT SPENDING 80% TAKATION Gvemme Spnding Taationmater than pter than tation apud How will Expansionary Fiscal Policy affect the Federal Budget? A budget surplus will decrease the national debt Deficit spending will decrease the national debt Deficit spending will increase the national debt A budget surplus will increase the national debt
a. What is the role of aggregate demand in eliminatingthe GDP gap? How does the slope of the AS curveaffectthe fiscal policyactions necessary to eliminatethe GDP gap?b. Define and give three examples of automaticstabilizers.c. How can a larger government fiscal deficit cause alarger international trade deficit?
Explain how the two main tools of fiscal policy can be applied by a government in theimplementation of expansionary fiscal policy
Describe the difficulties that can arise in implementing fiscal policy.??
Suppose that you are a member of the Council of Economic Advisers. The president has asked you to prepare a statement on the question, "What is the proper fiscal policy for the next 12 months?" Pre-pare such a statement, indicating (a) the current state of the economy (that is, the unemployment rate, growth in real income, and rate of inflation) and (b) your fiscal policy suggestions. Should the budget be in balance? Explain the reasoning behind your suggestions.
"The United States has the world'slargest fiscal deficit in total USdollars." Could anything be changedin this statement to correctly evaluatewhether the United States has a fiscaldeficit problem? a. We need to know how large theUS debt is already. b. Deficits should be expressed asa per cent of GDP to correctlyevaluate them. c. All of the information givenhere is necessary to correctlyevaluate whether the UnitedStates has a fiscal deficitproblem. d. We need to know whether thedeficit has occurred during aninflationary gap or arecessionary gap.
What are the implications of fiscal administration in the economy? Cite at least three significance.
Suppose equilibrium GDP is less than full-employment output and the economy is in a recession. What are the appropriate fiscal policies that would take the economy to full employment level? A) Increase Taxes B) Decrease governmnet spending C) Lower transfer payments D) Decrease Taxes
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'The U.S., world's largest economy, went into recession in February of 2020. It has taken a broad range of steps to combat the economic disruption caused by COVID-19. In response to this crisis, governments have enacted sweeping and sizable fiscal stimulus of trillions of dollars.' Is it an appropriate policy response if the primary responsibility of the government is to maintain economic growth? Explain the significance of Fiscal policy for an economy? Is there any difference in the two approaches of fiscal expansion through - direct transfer benefit and government spending directly on purchase of goods and services that may influence real GDP? What role does multiplier play? Explicate. Support your answer with the suitable diagram/s.

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projected future expenditures on entititlemt programs such as social security and medicare are expected to lead to increasingly large federal budget deficits in furture decades. factors behind this trend include