Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 24, Problem 2.3P
To determine
Increase in spending versus the tax cuts on budget deficit.
Expert Solution & Answer
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Check out a sample textbook solutionStudents have asked these similar questions
In which of the following cases does the size of the government’s debt and deficit indicate potential problems for the economy? Explain your answer.
a) The government’s debt is relatively low, but the government is running a large budget deficit as it builds a high-speed rail system to connect the major cities of the nation.
b) The government’s debt is relatively high due to a recently ended deficit-financed war, but the government is now running only a small budget deficit.
c) The government’s debt is relatively low, but the government is running a budget deficit to finance the interest payments on the debt.
Note:-
Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.
Define the budget deficit.
The table shows the tax revenues and the outlays of a nation at each level of real GDP.
What is the budget deficit when real GDP is $4 trillion?
>>> When you are asked to report a deficit, it is reported as a positive number. If you are asked to report the budget balance, and that balance is a deficit, then it is reported as a negative number.
When real GDP is $4 trillion, the budget deficit is
$nothing
trillion.
>>> Answer to 1 decimal place.
Real GDP
Tax revenues
Outlays
(trillions of dollars)
3
0.1
0.5
4
0.2
0.4
5
0.3
0.3
6
0.4
0.2
7
0.5
0.1
Chapter 24 Solutions
Principles of Economics (12th Edition)
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Similar questions
- The Effects of Fiscal Deficits on an Economy.arrow_forwardList what specific, deliberate actions the federal government could take to enact expansionary fiscal policy.arrow_forwardIn 10+ sentences, explain how we can eliminate the national debt using fiscal policy. Explain how we could change taxes and/or spending in order to balance the budget. Be specific on who you raise taxes on and where you cut spending. Make sure that you explain why you are making these changes to our fiscal policy. Also, discuss how these contractionary policies will impact our economy.arrow_forward
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