MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
10th Edition
ISBN: 9781319467203
Author: Mankiw
Publisher: MAC HIGHER
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Question
Chapter 17, Problem 3QQ
To determine
The debt financed tax cut and government debt.
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According to the traditional view on government debt, a tax cut without a cut in government spending:a. stimulates consumer spending and reduces national saving in the short run.b. stimulates consumer spending and reduces private saving in the short run.c. raises consumption in both the short run and the long run.d. has no effect on consumer spending but reduces national saving in the short run.e. has no effect on consumer spending but reduces private saving in the short run.
The stock of government debt will continue to rise unless the government.
a. Increases its taxes.
b. Runs a budget surplus.
c. Runs a budget deficit.
d. Decreases the size of its transfers.
e. Decreases its expenditures.
Which of these is MOST LIKELY to occur after the government increases taxes?
A.) Consumer spending decreases
B.) Annual deficits increase.
C.) Government programs decrease
D.)The national debt increases
Chapter 17 Solutions
MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
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