Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 10, Problem 2Q
To determine
Whether an increase in government spending over time leads to a consistently running budget deficit.
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Students have asked these similar questions
How does the federal government finance a budget deficit?
It prints more money.
It purchases U.S. Treasury bonds.
It cuts spending on entitlement programs.
It borrows funds by selling Treasury bonds.
How can a government that isn't running a deficit still get itself into financial trouble?
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?
Chapter 10 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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