Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Question
Chapter 11, Problem 7CQ
To determine
Reasons for the ups and downs of business cycle by changes in fiscal policy.
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Students have asked these similar questions
Can governments use expansionary fiscal
policy or expansionary monetary to effectively
fight recessions? Why or Why Not?
Was fiscal policy effective when the US economy was experiencing stagflation during the 1970s? Why or why not?
Why is getting the magnitude, or dollar size, of the policy change just right the most difficult thing to do when implementing discretionary fiscal policy?
Chapter 11 Solutions
Economics: Private and Public Choice
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- During the Great Recession of 20082009, what actions would have been required of Congress and the President had a balanced budget amendment to the Constitution been ratified? What impact would that have had on the unemployment rate?arrow_forwardWhy do critics charge that fiscal policy has a “big-government bias”?arrow_forwardhow does the fiscal policy work?arrow_forward
- What are the implications of the current fiscal stimulus and low interest on the future of our country from an economic perspective?arrow_forwardIf stability of the economy is the primary objective of Fiscal Policy, then an Annually Balanced Budget (Government Expenditures = Tax Revenues) is the best policy approach. True or False?arrow_forwardIf the objective of fiscal policy is to stabilize (achieve full-employment (potential) GDP and maintain price level stability (control inflation)) the economy and promote economic growth, then would an annually balanced budget be effective? Why or why not?arrow_forward
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