Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 23.3, Problem 2YTE
To determine
The concept of new accounting.
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Critics of “new accounting” for federal borrowing argue that it does not matter what the government spends the money for. What matters is the total amount that the government spends minus taxes collected. Explain this viewpoint.
Would you predict that government expenditures would be higher or lower if taxes (or user charges) were required for the finance of all expenditures? Why? Do you think the government would spend funds more or less efficiently if it could not issue debt? Explain.
How will the debt held by the public for the bottom line of $17.7 affect our economy?
Chapter 23 Solutions
Economics For Today
Ch. 23.1 - Prob. 1YTECh. 23.1 - Prob. 2YTECh. 23.3 - Prob. 1YTECh. 23.3 - Prob. 2YTECh. 23 - Prob. 1SQPCh. 23 - Prob. 2SQPCh. 23 - Prob. 3SQPCh. 23 - Prob. 4SQPCh. 23 - Prob. 5SQPCh. 23 - Prob. 6SQP
Ch. 23 - Prob. 7SQPCh. 23 - Prob. 8SQPCh. 23 - Prob. 9SQPCh. 23 - Prob. 10SQPCh. 23 - Prob. 11SQPCh. 23 - Prob. 1SQCh. 23 - Prob. 2SQCh. 23 - Prob. 3SQCh. 23 - Prob. 4SQCh. 23 - Prob. 5SQCh. 23 - Prob. 6SQCh. 23 - Prob. 7SQCh. 23 - Prob. 8SQCh. 23 - Prob. 9SQCh. 23 - Prob. 10SQCh. 23 - Prob. 11SQCh. 23 - Prob. 12SQCh. 23 - Prob. 13SQCh. 23 - Prob. 14SQCh. 23 - Prob. 15SQCh. 23 - Prob. 16SQCh. 23 - Prob. 17SQCh. 23 - Prob. 18SQCh. 23 - Prob. 19SQCh. 23 - Prob. 20SQ
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- A government starts off with a total debt of $3.5 billion. In year one, the government runs a deficit of 400 million. In year two, the government runs a deficit of 1 billion. In year three, the government runs a surplus of 200 million. What is the total debt of the government at the end of year three?arrow_forwardWhat is the difference between a budget deficit and the national debt?arrow_forwardIf a government runs a budget deficit of 10 billion dollars each year for ten years, then a surplus of 1 billion for five years, and then a balanced budget for another ten years, what is the government debt?arrow_forward
- What must take place for the government to run deficits without any crowding out?arrow_forwardGive some examples of changes in federal spending and taxes by the government that would be fiscal policy and some that would not.arrow_forwardIn a booming economy, is the federal government more likely to run surpluses or deficits? What are the various factors at play?arrow_forward
- Debt has a certain self-reinforcing quality to it. There is one category of government spending that automatically Increases along with the federal debt. What Is It?arrow_forwardThe government’s budget deficits have tended to be somewhat ‘counter-cyclical’ with deficits increasing during recessions and surpluses eventually accruing during good economic times. List and discuss several reasons for this pattern.arrow_forwardMatch the terms with their definition. Budget surplus Budget deficit Balanced budget Government debtarrow_forward
- Any deficit that a government might run must be financed somehow. Which of the following is a vehicle by which a government might finance spending beyond its means? a. Turning over existing debt with advantageously lower interest rates b. Floating new bonds c. Purchasing existing bonds d. Calling in foreign debtarrow_forwardWhat budget changes would have to occur in order to lower an annual deficit? Annual expenditures would have to rise. Annual expenditures would have to decline and annual tax collections would have to rise. Annual tax collections would have to fall. Annual expenditures would have to rise and annual tax collections would have to fall.arrow_forwardGive typing answer with explanation and conclusion Name two important ways that government debt is different from personal debt. Is there a method of paying back the debt that would discourage investors from lending money to the government again?arrow_forward
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