Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 11, Problem 4CQ
To determine
Budget deficit, source to finance budget deficit, and Keynesian’s view on the impact of budget deficit on aggregate
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According to Keynesians, when should the federal government run a deficit and when should it run a surplus?
According to Keynesians, when should the federal government run a budget deficit and when should it run a surplus?
When the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy? Is it better to concentrate on aggregate demand or aggregate supply? Why?
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Economics: Private and Public Choice (MindTap Course List)
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- According to Keynesian economics, what impact would a balanced budget amendment to the constitution requiring the federal government to balance its budget annually have on the economy?arrow_forwardWhen the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy?arrow_forwardWhy does a balanced budget increase in spending and taxes increase aggregate demand?arrow_forward
- What policy might the federal government implement with regard to taxes and spending to help stop the economy from falling into recession?arrow_forwardCan governments use expansionary fiscal policy or expansionary monetary to effectively fight recessions? Why or Why Not?arrow_forwardHow would a Keynesian Economist use Fiscal Policy to fight a Recession? Please do not write about Monetary Policy here, only Fiscal Policy.arrow_forward
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- From 2008, how might monetary policy (as reflected in the OCR) have affected the degree of crowding out resulting from fiscal policy (as reflected in government expenditure)?arrow_forwardWhy do Republicans like tax cuts? Why are tax cuts a good thing? How does it affect the aggregate supply and demand graph?arrow_forwardWhat is the Effects of Fiscal Policy on Real GDP and the Price Level?arrow_forward
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