Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
Question
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Chapter 24, Problem 2.3P
To determine

Increase in spending versus the tax cuts on budget deficit.

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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
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