Suppose you are the economic policy adviser to the president and are asked what should be done to eliminate a federal deficit. You would recommend to government spending and taxes.

How should the government execute Fiscal Policy?

During difficult economic times, why are uniform across-the-board budget cuts poor fiscal policy?

How would a tax cut impact the National Budget and the National Debt? What are the pros and cons of running a deficit? Would you support such a tax cut and for whom should we impose the tax cut?

Congress recently passed and President Biden signed the American Rescue Plan (ARP), which will add $1.9 trillion to the federal deficit over the next ten years. Even before this new spending, federal debt held by the public was slated to reach 107% of GDP by 2031, the highest in history. What do high deficits mean going forward?

In year one government taxes are 590,000 and government spending is 600,000 in year two government taxes are 590,000 and government spending is 590,000 in year three government taxes are 630,000 and government spending is 600,000. What is the government deficit for year two and provide the size of the government debt or surplus at the end of all three year.

What is the relationship between the government deficit and debt? Why is it essential that governments make the payments on their debts?

The government starts with a debt of $4 billion.  In year one, the government runs a deficit of $600 million. In year two, the government runs a deficit of $1 billion. In year three, the government runs a surplus of $300 million.  What is the total debt of the government at the end of year three? Show work.

What are some of the arguments for and against a requirement that the federal government budget be balanced every year?

Identify the effects of fiscal policy on the economy