Assumed that the government maintained a balanced budget initially. However, the financialsecretary underestimated the recovery of local economy and the budget surplus is resulted. How does the budget surplus affect the loanable fund market? How does this market restore the equilibrium? How is the ‘private sector spending’ affected by the ‘public sector spending’? Explain and illustrate with a well-labelled diagram

Assumed that the government maintained a balanced budget initially. However, the financialsecretary underestimated the recovery of local economy and the budget surplus is resulted. How does the budget surplus affect the loanable fund market? How does this market restore the equilibrium? How is the ‘private sector spending’ affected by the ‘public sector spending’? Explain and illustrate with a well-labelled diagram

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

If government procurement officials are stewards of public funds, how can the publicensure that this money is being spent correctly? What checks and balances come to yourmind when it comes to deciding how and where to spend a ministry’s budget?
Economics: Public Economics Question: 1 Over long periods of time, the present discounted value of tax revenue must be greater than or equal to the present discounted value of government expenditures. This statement illustrates the concept of a. income equality b. capital markets c. intergenerational equity d. intertemporal budget constraints Question: 2 Why do some budget modelers criticize the use of static scoring?a. The impact of government policy on the economy is not perfectly understood. b. It is unreasonable to assume that government policy does not affect the size of the economy. c. most policy does not result in individuals changing behavior.d. government policy only changes distribution of resources, not their availability. Question: 3 If the economy is in recession, the government budget deficit is ___ the cyclically- adjusted deficit. a. the same asb. unrelated toc. smaller than (in absolute value) d. greater than (in absolute value) Question: 4 According to…
Question Please select the correct term for each statement below. National savings, budget deficit, capital, inflow, budget, surplus, and budget balance a. the difference between the amount the government collects and how much it spend. b. when government savigns are combined with all of the privately-held savings from across the country. c. the result when the government spends more money than it takes in through taxes. d. the net amount of funds coming into a country. e. when the government spends less money than it takes in through taxes.
Examine the consequences for a hypothetical developing economy if the rate of borrowing to fund a fiscal deficit is growing annually at a faster rate than the GDP. Include a graphical analyses using the below hypothetical numbers and percentages. GDP = R1000 Fiscal Deficit = R1200 GDP is used to settle / pay for fiscal deficits. Therefore R1000 - R1200 = R200. This implies that the deficit keeps on growing. Remember the GDP equation and the impact of imports and exports.
From the 1960s to 2020, transfer payments A. have declined by half as a percentage of total federal government expenditures. B. have grown very slowly as a percentage of total federal government expenditures. C. remained the same percentage of total federal government expenditures. D. have risen from 25 percent to just over 50 percent percent of federal government expenditures.
Show graphically how an increase in household confidence about future income affects the loanable funds market. 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.
Discuss the important features of the public budget and the relationshipbetween revenues and expenditures.
Figure 26-3. The figure shows two demand-for-loanable-funds curves and two supply-of-loanable-funds curves. B o A F S₁ D2 D1 Refer to Figure 26-3. Which of the following movements shows the effects of the government going from a budget deficit to a budget surplus? OA. a movement from Point A to Point B OB. a movement from Point B to Point A OC. a movement from Point A to Point F OD. a movement from Point C to Point B
If the total budget expenditure is 6321 billion And the total budget receipts are 2891 billion calculate the budgetary deficit?
In view of the large adverse impact of COVID-19 on the world economy, many governments have implemented expansionary fiscal policy. Together with a decrease in tax revenues, the governments have sufferedlarge deficits. How does a government deficit affect the interest rate, the quantity of loanable funds and economic growth? Explain your answers with a diagram
A government is facing a significant budget deficit due to high levels of public spending and declining tax revenues. To address this, several measures are being considered, including cutting public expenditures, increasing taxes, and implementing more efficient tax collection methods. The impact of a budget deficit on an economy can include increased national debt and potential inflationary pressures. In this situation, the most effective approach to address the budget deficit would be:A) Borrowing more funds internationallyB) Cutting essential public servicesC) Increasing taxes and improving tax collectionD) Privatizing all public services Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
Use a circular flow diagram to illustrate how the allocation of resources is affected by government’s revenue and expenditure decisions.