Sir John Mayard Keynes said that the only time a should be balanced is when the economy is at full employment.  However, 49 of 50 US states have balanced budget requirements.  What do you understand from the Keynes statement and why do you think there is so much political impetus for balanced budgets in America.

Q: How will the deficit for the bottom line budget of $3.1 trillion affect the economy?

A: The budget deficit would result in the increase of the government expenditures over the revenues.…

Q: Suppose actual real GDP is $13.19 trillion, potential real GDP is $12.96 trillion, the marginal…

A: Marginal Propensity to Consume(MPC): The marginal Propensity to Consume refers to the proportion of…

Q: How does fiscal policy affect the equilibrium income in an economy

A: The fiscal policy is the use of government revenue (taxes or tax cut) and the government…

Q: A recent study from the National Bureau of Economic Research examined what people did with the…

A: Since you have asked multiple questions, we will answer the first two sub-parts for you. If you want…

Q: Economist Arthur Laffer famously pointed out that, in some cases, income tax revenue can actually go…

A: As the tax rate goes down, expectation of tax aversion or tax avoidance likewise goes down. Each…

Q: Discussion 4 Discuss the "FISCAL POLICY: A KEYNESIAN PERSPECTIVE" was John Maynard Keynes Right?…

A: According to keynes,fiscal policy was very important for government.It needs to be initiated…

Q: According to classical economists, what are the reasons of fiscal policy not being effective in an…

A: Fiscal Policy refers to the use of policies related to taxation and public expenditure by the…

Q: Based on the Krugman text and your reader articles, what position do you take on the current fiscal…

A: Based on economic theory and empirical evidence, there are arguments for both stimulus and austerity…

Q: What is the importance of studying the national budget and how it will affect our economy?

A: national budget is important because of following reasons :- 1. Hepls in allocation and distribution…

Q: The economist views the budget as a public policy making tool? True or false

A: False. Reason- Economists view the budget as the opportunity cost. They see budget as the…

Q: Suppose actual real GDP is $7.91 trillion, potential real GDP is $13.33 trillion, the marginal…

A: Marginal Propensity to Consume(MPC): The marginal Propensity to Consume refers to the proportion of…

Q: Does MPC matter when using taxes to stimulate the economy in the short-run?

A: The stimulation of the economy using taxes involves fiscal policy. The expansionary/contractionary…

Q: Describe the shortcomings of Fiscal Policy. Be as thorough as possible.

A: Fiscal policy is the one where government changes its spending and tax policies in order to achieve…

Q: Suppose that Shen, an economist from a research facility in Washington, and Valerie, another…

A: Economists are professionals who study and dissect economic frameworks, ways of behaving, and…

Q: Why does the budget require a forecast of the economy? Under what circumstances would actual…

A: A budget is a financial document or the financial plan of an economy which includes the planned…

Q: of real GDP if government spending increases by $150? 18. What is the new equilibrium level of real…

A:

Q: Assume today is October 20, 2021. In which quarter of fiscal year 2022 is the federal budget?

A: The federal budget is the government's estimate of revenue and spending for each fiscal year. The…

Q: Congress would like to increase tax revenues by 5.5 percent. Assume that the average taxpayer in the…

A: The following basic information as follows under:-Congress would like to increase tax revenues by…

Q: Use what you have learned about the fiscal multiplier to explain why, in Krugman’s opinion, fiscal…

A: Introduction Paul Krugman is an American economist and Nobel Prize laureate who works at the…

Q: What is the Effects of Fiscal Policy on Real GDP and the Price Level?

A: Fiscal policy refers to a government's approach to influencing the state of the economy through…

Q: "Even if there is full information and that wages and prices are fully flexible as what the…

A: Expansionary fiscal approach incorporates tax breaks, move installments, refunds and expanded…

Q: Does a balanced budget multiplier of one suggests that the government can stimulate economic growth…

A: The Government stimulates economic growth without changing the size of the budget deficit or surplus…

Q: Vhich of the following is true of the federal budget process in the U.S.? O a. Detailed budgeting…

A: The federal budget is considered as the estimation of the government revenue and spending for each…

Q: To eliminate the deficit (and halt the growth of the net public debt), a politician suggests that…

A: The deficit means the government expenditure being larger than the government revenue. The…

Q: How did John Maynard Keynes economic theory influence the 20th Century fiscal policy?

A: Fiscal policy: - it is a tool of the government of a country in which the government adjusts its…

Q: Imagine Sri Lanka is trying to reduce inflation using a contractionary fiscal policy. Discuss the…

A: The government uses fiscal policy to stabilize the economy when it is overheated or output growth is…

Q: Why is identifying potential opportunities, and managing within predictable limits for fiscal policy…

A: Fiscal policy is an important tool for dealing with the economy on account of its capacity to…

Q: Which economic policies affect a government's budget and include the increase or decrease the money…

A: Economic policies are policies or course of action taken by the government in the field of…

Q: List what specific, deliberate actions the federal government could take to enact expansionary…

A: Expansionary fiscal policy is aimed at increasing aggregate demand when the economy is in a…

Q: What is the difference between federal purchases and federal expenditures? Are federal purchases…

A: Federal purchases, also known as government purchases or government spending on goods and services,…

Q: In 10+ sentences, explain how we can eliminate the national debt using fiscal policy. Explain how we…

A: The use of government spending and tax policies to influence economic conditions, especially…

Q: If Investment = f(r*) a.  Explain with pictures how it affects the balance of Supply/Saving and…

A: The economies around the world tend to work upon the basis of the working of various economic…

Q: Please answer the question below: If the current real GDP is P700 billion, which of the following…

A: MPC = 0.8 Potential output = P800 billion Real GDP = P700 billion

Q: According to Keynesian economics, what impact would a balanced budget amendment to the constitution…

A: A balanced budget amendment is a constitutional requirement that a state's spending cannot exceed…

Q: A friend of yours argues that federal government spending is out of control and significant cuts in…

A: a. To calculate the percentage of federal government spending that comes from research and foreign…

Q: How would a Keynesian Economist use Fiscal Policy to fight a Recession? Please do not write about…

A: "Recession means reduction or fall in the economic activity and this fall is visible in real GDP,…

Q: Which of the following is an example of fiscal policy? Select an answer and submit. For keyboard…

A: Fiscal Policy refers to the measures employed by the governments to stabilize the economy of the…

Laffer Curve Analysis

In terms of economics, the Laffer curve was popular among those economists who were or who belonged to the supply side of the economic peripheral.  This concept was popularized by the famous supply-side economist known as Arthur Laffer. This curve illustrated the relationship between the tax rates and government revenue. It is already known that the tax which the public or individuals residing in an economy bear is the revenue or income of the government with the help of which the government does all the necessary works in the society, which is beneficial for the economy.