Why is the budget philosophy Keynes supports politically difficult to achieve? Group of answer choices -Keynes's budget philosophy requires surpluses during recessions and deficits during expansions. This is difficult because during recessions governments usually don't run surpluses. -Keynes's budget philosophy states that a government should balance its budget each fiscal year. However, politically this is difficult, because during recessionary years tax revenue usually decreases. -It is not always clear what constitutes a business cycle. In some years, GDP rises, and we may still be in a recession. -Keynes recommends that government run surpluses during expansions. Politically, it is difficult to achieve a surplus. For a surplus to occur, we would need politicians to raise taxes and lower government spending. Politicians usually raise government spending, not lower it.
Why is the budget philosophy Keynes supports politically difficult to achieve? Group of answer choices -Keynes's budget philosophy requires surpluses during recessions and deficits during expansions. This is difficult because during recessions governments usually don't run surpluses. -Keynes's budget philosophy states that a government should balance its budget each fiscal year. However, politically this is difficult, because during recessionary years tax revenue usually decreases. -It is not always clear what constitutes a business cycle. In some years, GDP rises, and we may still be in a recession. -Keynes recommends that government run surpluses during expansions. Politically, it is difficult to achieve a surplus. For a surplus to occur, we would need politicians to raise taxes and lower government spending. Politicians usually raise government spending, not lower it.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Why is the budget philosophy Keynes supports politically difficult to achieve?
Group of answer choices
-Keynes's budget philosophy requires surpluses during recessions and deficits during expansions. This is difficult because during recessions governments usually don't run surpluses.
-Keynes's budget philosophy states that a government should balance its budget each fiscal year. However, politically this is difficult, because during recessionary years tax revenue usually decreases.
-It is not always clear what constitutes a business cycle. In some years, GDP rises, and we may still be in a recession.
-Keynes recommends that government run surpluses during expansions. Politically, it is difficult to achieve a surplus. For a surplus to occur, we would need politicians to raise taxes and lower government spending. Politicians usually raise government spending, not lower it.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education