Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 18, Problem 11QP
To determine
Explain whether the statement is unacceptable or not.
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Students have asked these similar questions
How could the government lower the federal deficit?
How can a government that isn't running a deficit still get itself into financial trouble?
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.
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- 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?arrow_forwardIn which of the following cases does the size of the government’s debt and deficit indicate potential problems for the economy? Explain your answer. a) The government’s debt is relatively low, but the government is running a large budget deficit as it builds a high-speed rail system to connect the major cities of the nation. b) The government’s debt is relatively high due to a recently ended deficit-financed war, but the government is now running only a small budget deficit. c) The government’s debt is relatively low, but the government is running a budget deficit to finance the interest payments on the debt. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardLook into the current level of the national debt and the federal deficit in the U.S. Pick any government program and research how much the U.S. spends on it. Does the amount surprise you? What might happen if the budget for the program were increased or reduced? Should the current deficit and debt be cut down? What would be some pros and cons of reducing them?arrow_forward
- What effect did the economic program have on the federal deficit?arrow_forwardHow will the deficit for the bottom line budget of $3.1 trillion affect the economy?arrow_forwardWhen the economy is in recession, government revenue falls due to a falling tax base. Therefore the proper role of government should be to increase taxes and cut spending so as to balance the Federal budget. Do you agree? Why?arrow_forward
- The U.S. government's debt is currently about $20 trillion, which is 105% of GDP. How much debt is too much debt for our country?arrow_forwardIf you voted for your committees to increase overall spending under your jurisdiction, resulting in a budget deficit for the overall federal budget, what would you expect to see happen to the national debt?arrow_forwardHow fiscal policy works, and its benefits.arrow_forward
- What is the difference between your running a budget deficit and adding to your own personal debt and the federal government running a budget deficit and adding to national debt?arrow_forwardHow and why would joint budget resolutions be effective at influencing budget reforms and reducing deficits?arrow_forward
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