Principles of Economics (Second Edition)
2nd Edition
ISBN: 9780393614077
Author: coppock, Lee; Mateer, Dirk
Publisher: W. W. Norton & Company
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Question
Chapter 28, Problem 3QFR
To determine
To find:
The years back in the 1960s when the US government faced a surplus and the reason for this surplus disappears later.
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Students have asked these similar questions
President Biden proposed increasing the corporate tax rate from 21% to 28%. However, this reform has been hard to pass in the Senate.
Imagine he asks you to predict revenue changes as a result of a lower increase in the corporate tax (from 21% to 24%). What kind of basic information would you need to make such predictions?
Trace the implications of a government budget surplus on the following:
National saving
Interest rates
Private investment
Economic growth
Future living standards
When tracing the effects of the budget surplus, list the assumptions you are making.
20 Lilliput is a country that has closed borders and does not import or export any goods or services; hence, they do not worry about
trade with other countries.
Total spending for the federal government of Lilliput for the last fiscal year was $24.19 billion. The country collected $22.9
billion in taxes during this same fiscal year. Assume government transfers were zero.
Based on this information, what is Lilliput's budget balance?
Enter your answer to two decimal places.
budget balance: $
In the last fiscal year, Lilliput was running
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Principles of Economics (Second Edition)
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