Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 31, Problem 7RQ
Based on the national saving and investment identity, what are the three ways the macroeconomy might react to greater government budget deficits?
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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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Similar questions
- In the context of budget deficits, what is crowding out?arrow_forwardWhich of the following best describes a fiscal policy tool? 1. Government spending II. Government taxes III. Interest rates. IV. Bank lending V. Financial capital markets I and II I and VI III, IV, and Varrow_forwardHow might an increase in government spending affect the national debt and economic growth in the short term? A. Increase national debt and slow economic growth B. Decrease national debt and stimulate economic growth C. Increase national debt and stimulate economic growth D. Decrease national debt and slow economic growtharrow_forward
- Using a graphical analyses explore the consequences for a hypothetical developing economy, if the the rate of borrowing to fund a fiscal deficit is growing annually at a faster rate than GDP.arrow_forwardFor the last 50 years or so, republicans and democrats at the national level have each favored policies that have led to increased budget deficits, but the policies are different. Republicans have favored tax cuts, while democrats have favored increases in government spending. Perform TWO composition of output analyses, one that examines the impact of a tax cut and one that examines the impact of an increase in government spending. Then, write a sentence or two that describes how the impacts of the two are the same and how they are differentarrow_forwardwhats answerarrow_forward
- Answer the following questions: As you know, the US government has been running budget deficits for several years now. In your opinion, and based on economic reasoning, what will happen to the US economy if the US Federal Government continues to run annual budget deficits for the next decade. Will the economy survive that? Will the economy grow? Will it grow as fast as it could? Will the deficits cause the economy to grow faster? Will it grow at all? These are some of the questions you might address in your primary post.arrow_forwardDoes a balanced budget multiplier of one suggests that the government can stimulate economic growth without changing the size of the budget deficit or surplus?arrow_forwardExplain the term federal deficits.arrow_forward
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