Tax is not the only way to finance the government expenditures. Government borrowing has been a major mechanism to sustain the large outlays in the recent decades. In the 2009 financial crisis, the Obama administration has implemented a large stimulus. Retrospectively, however, it was likely to be too small to bring the U.S. economy back to the trajectory. In contrast, the spending during the 2020-21 pandemic has been significantly larger (both under Trump and Biden administrations). Using the budget projection in the CBO's report, contrast the magnitude of the budget deficit in 2009 and 2020, and 2021 and describe your findings.

Tax is not the only way to finance the government expenditures. Government borrowing has been a major mechanism to sustain the large outlays in the recent decades. In the 2009 financial crisis, the Obama administration has implemented a large stimulus. Retrospectively, however, it was likely to be too small to bring the U.S. economy back to the trajectory. In contrast, the spending during the 2020-21 pandemic has been significantly larger (both under Trump and Biden administrations). Using the budget projection in the CBO's report, contrast the magnitude of the budget deficit in 2009 and 2020, and 2021 and describe your findings.

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

Please give me correct answer with full explanation; otherwise, i give multiple downvote.
Contractionary fiscal policy is designed to combat demand-pull inflation and consists of a decrease in government spending and/or an increase in taxes. Group of answer choices True False
Nigeria typically runs a gov budget surplus, and it has a small debt to GDP ratio (approximately 40%). This year, Nigeria is running a government budget deficit, and it is financing that deficit by selling government bonds.This year's government budget deficit is causing interest rates to (increase/decrease/remain the same/change ambiguously) and the debt to ( increase/decrease/remain the same/change ambiguously.) Nigeria is predicted to return to a surplus position next year. If it is successful, interest rates will (increase/decrease/remain the same/change ambiguously) and the debt will (increase/decrease/remain the same/change ambiguously.) In August 2019, Nigeria announced that it would increase its sale of government bonds from 55 billion nigerian currency to 85 billion nigerian currency. This resulted in (an increase, decrease, no change, an ambiguous change) in the price of government bonds and (an increase, decrease, no change, an ambiguous change) in the yield of government…
Which of the following would not be considered an automatic stabilizer? Question 13 options: Income tax Unemployment compensation Education spending Food stamps
Answer choices to the first box is "lower, higher, the same". Answer choices to the second box is "lower incomes, higher incomes, all income levels equally".
When GDP and incomes are high, the government collects more dollars in tax revenue. When they're low, the government collects fewer tax dollars. These higher and lower amounts help even out the economy without having to wait for changes in tax rates or other legal matters. For these reasons, tax revenues (not rates) are best described as automatic stabilizers. contractionary fiscal policy monetary policy O the marginal propensity to consume
Fiscal policy can be classified into which two groups
Which of the following is an example of an action where crowding-out could occur? A decrease in government housing subsidies causes an increase in private spending on housing. The government lowers taxes, but spending does not increase. The government increases spending but does not increase taxes, and the size of the budget deficit increases. The government invests in education, shifting the long-run aggregate supply curve to the right. The government pays $2 million to workers who have lost their jobs in the form of unemployment compensation.
Fiscal policy attempts to achieve all of the following macroeconomics objectives EXCEPT, A) sustained economic growth. B) a stable money supply. C) full employment. D) price level stability.
In the context of macroeconomic stabilization policies, which scenario best illustrates the concept of "automatic stabilizers"? a) A government increases spending on infrastructure projects during a recession as part of a deliberate fiscal stimulus package. b) During an economic downturn, unemployment benefits automatically increase as more people become unemployed, providing a buffer to the economy. c) The central bank adjusts the interest rates in response to changes in inflation and unemployment data. d) A government adopts a new policy to increase taxes on high-income earners during periods of economic boom.
A government is issuing treasury bonds to finance its budget deficit. In Financial Economics, this action represents:A) A method to decrease the national debtB) A way to finance government spending without creating debtC) A means of raising public funds by incurring government debtD) A strategy to redistribute wealth without incurring debt
Is the following statement TRUE or FALSE? Please provide reason for the answer. If tax revenues are lesser government expenditures in a year, the budget deficit would be negative.