1. Use the graph below to answer the following questions: BB, (G. BB, (G,. t,) F D. 5300 5000 Real Income (Y) 4700 a. In the figure above, if the budget line is BBo and the natural real GDP is $5300, what is the structural surplus or deficit? b. In the figure above, if the budget line is BBo and the natural real GDP is $5300, what is the cyclical surplus or deficit? c. In the figure above, if the budget line BB1, the natural real GDP is $5300, and actual real

Suppose the government's present value of current and projected future outlays is 75 percent of GDP and its present value of current and projected future revenues is 50 percent of GDP. What gap does this describe, and what is the size of the gap?   This information describes the _______.     A. fiscal gap, which is 25 percent of GDP   B. generational gap, which is 25 percent of GDP   C. fiscal gap, which is 125 percent of GDP   D. fiscal gap, which is – 25 percent of GDP

8. Agreement and disagreement among economists Suppose that Kevin, an economist from a consulting firm, and Maria, another economist from a graduate program in the Northeast, are both guests a popular science podcast. The host of the podcast is facilitating their debate over budget deficits. The following dialogue represents a portion of the transcript of their discussion: Maria: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Kevin: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits. Maria: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. The disagreement between these economists is most likely due to Despite their differences, with which proposition are two economists chosen at random most likely to agree? Central banks should focus more on…

Always use economic terms, diagrams. "Counter-cyclical fiscal policy works.  If consumers and businesses lose confidence because of the changing world, the government can fix this economic problem - that is what the Biden $1.9 trillion stimulus was all about.  Sure, there might be some issues with the deficit, but given a recovery, the government can pay that deficit off. Also, since we are in a very inflationary period again we might expect counter-cyclical fiscal policy to resolve some of the debt issues."  Please explain this comment.  (Hint: don't forget to use an AS AD diagram and possibly a business cycle diagram).

Read the following premise carefully and answer the questions specifically and in detail. "In the face of unstable economic growth due to a recession or accelerated inflation, the potential problems of high public debt include increased income inequality, reduced economic incentives, and crowding out private investment."   A. Express in detail the effects of expansionary and contractionary fiscal policy on income and the price level. B. Using the premise presented as a basis, argue about the intervention of fiscal policy as an instrument to promote the growth, sustainability and economic stability of a country. (Gives an example in detail.)

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Answer the questions below for the economy of Motak using the graph below. The Economy of Motak Government spending / net taxes 400 350 300 250 200 150 100 50 200 400 600 800 1000 1200 1400 1600 Real GDP NTR G1 Tools a. If GDP is $800 and government spending is G₁, the size of Motak's budget deficit is $ b. If government spending is decreased by the size of the deficit in part (a), draw the new curve labelled G₂ in the graphing area above. c. Suppose the multiplier has a value of 2, the new level of equilibrium GDP is $ d. Motak's deficit at this new level of equilibrium GDP is $ billion. billion. billion.