Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506756
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 budget deficit and when should it run a surplus?
According to Keynesians, when should the federal government run a 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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Macroeconomics: Private and Public Choice (MindTap Course List)
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- When the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy?arrow_forwardWhat policy might the federal government implement with regard to taxes and spending to help stop the economy from falling into recession?arrow_forwardWhy does a balanced budget increase in spending and taxes increase aggregate demand?arrow_forward
- 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_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
- Why tax cuts can increase both aggregate demand and aggregate supply?arrow_forwardAccording to Keynesian economics, what impact would a balanced budget amendment to the constuition requiring the federal government to balance its budget annually have on the economy?arrow_forwardFrom 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_forward
- From a Keynesian point of view, which is more likely to cause a recession: aggregate demand or aggregate supply, and why?arrow_forwardUsing the concept in Keynesian economics, which one of the following may not be an effective fiscal policy when there is inflation? a) increasing aggregate demand b) increasing corporate taxes. c) increasing personal taxes. d) decreasing government purchases.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_forward
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