Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Chapter 31, Problem 23CTQ
Under what condition would crowding out not inhibit long-run
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Chapter 31 Solutions
Principles of Economics 2e
Ch. 31 - In a country, private savings equals 600, the...Ch. 31 - Assume an economy has a budget surplus of 1,000,...Ch. 31 - In the late 1990s, the U.S. government moved from...Ch. 31 - Imagine an economy in which Ricardian equivalence...Ch. 31 - Why have many education experts recently placed an...Ch. 31 - What are some steps the government can take to...Ch. 31 - Based on the national saving and investment...Ch. 31 - How would you expect larger budget deficits to...Ch. 31 - Under what conditions will a larger budget deficit...Ch. 31 - What is the theory of Ricardian equivalence?
Ch. 31 - What does the concept of rationality have to do...Ch. 31 - What are some of the ways fiscal policy might...Ch. 31 - What are some fiscal policies for improving a...Ch. 31 - What are some fiscal policies for improving the...Ch. 31 - Explain how cuts in funding for programs such as...Ch. 31 - Assume there is no discretionary increase in...Ch. 31 - Explain how decreased domestic investments that...Ch. 31 - The U.S. government has shut down a number of...Ch. 31 - Explain how a shift from a government budget...Ch. 31 - Describe how a plan for reducing the government...Ch. 31 - Explain whether or not you agree with the premise...Ch. 31 - Explain why the government might prefer to provide...Ch. 31 - Under what condition would crowding out not...Ch. 31 - What must take place for the government to run...Ch. 31 - Sketch a diagram of how a budget deficit causes a...Ch. 31 - Sketch a diagram of how sustained budget deficits...Ch. 31 - Assume that the newly independent government of...Ch. 31 - Illustrate the concept of Ricardian equivalence...Ch. 31 - During the most recent recession, some economists...
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- Please list the 4 key supply-side growth factors we discussed and discuss their viability (do-ability) in terms of getting our economy growing again, given that today our economy is not growing. The issue of viability – if the economy is growing slowly or not at all, do we have any chance of achieving success with each of the 4 growth factors? What will likely cause us problems? What approaches could we use to increase our odds of success? You need to think carefully about this one.arrow_forward16.arrow_forwardSuppose the economy has fallen into a severe recession. From a macroeconomic theory point of view which of the following is an appropriate government policy? reduce government spending balance the Federal budget increase government spending on goods and services increase taxes on capital gainsarrow_forward
- Assume a country would like to increase investment by limiting consumption. What would be the point of a policy like that? What would be the impact on the economy? Who would benefit? Who would lose out?arrow_forwardWhat are some of the ways that an LDC can increase its rate of returns to investment in secondary and higher educationarrow_forwardUsing a correctly labeled loanable funds graph, show the effect of the contractionary fiscal policy decreasing government spending on real interest rates. Given the change in the real interest rate. What is the impact on each of the following? a. investment b. Economic growth rate. Explain. c. The international value of the dollar. Explain. Now assume instead that the government takes no policy action to fix the problem of the economy that is operating above full employment. In the long run, will the short-run aggregate supply increase, decrease, or remain unchanged? Explain.arrow_forward
- a. After Exxon-Mobile discovered major oil deposits off its coast a few years ago, Guyana's real GDP has grown about 5.5% per year. (It used to be one of the world's poorest countries and rarely experienced any growth.) How long will it take for this South American country to double its GDP? b. The United States's real GDP declined by 4.2% from peak to trough of the global financial crisis in 2008-2009. The United Kingdom's real GDP in 2008 was £1.93 trillion. Then the global financial crisis hit and the United Kingdom's real GDP shrunk to £1.84 trillion in 2009. Calculate the growth rate of real GDP over this time frame in the UK. Which country fared worse? c. Niger's population was 24 million last year and is 25 million this year. If Niger's real GDP was $13.7 billion USD last year and is $14.9 billion this year, what is its growth rate of real GDP per capita from last year to this year? d. List two reasons the CPI may not be an accurate measure of the cost of living.arrow_forwardConsider an economy that uses exclusively labor and capital to produce.Suddenly, the government of the economy plans to permanently increase the level ofgovernment purchases. Please use words and figures to illustrate your answers.(1) Suppose the economy is a closed one. How does the long-run GDP of the economychange because of the increased government purchases? (2) Will your answer to (1) be changed if the economy is an open one? Explain youranswers briefly.(3) Suppose the economy is a closed one. Will the increased government purchaseschange the equilibrium interest rate?arrow_forwardplease i beg u answer this question: Using documents 4 - 6, make three claims about the actions President Reagan and his administration undertook in order to foster economic growth. Be sure your claim explains how the action taken would foster economic growth. Support each claim with evidence from at least one document.arrow_forward
- Policymakers trying to promote economic growth must confront the issue of what kinds of capital the economy needs most. If policymakers decide to rely on the marketplace to allocate the pool of saving to alternative types of investment, Those industries with the kinds of capital that yield the lowest marginal product will borrow the most. Those industries with the kinds of capital that yield the highest marginal product will borrow the least. All industries will have incentives to borrow more. Those industries with the kinds of capital that yield the highest marginal product will borrow the most.arrow_forwardWhat was “Reaganomics”?arrow_forwardGive any two example of the capital expenditures!arrow_forward
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