Principles of Economics (Second Edition)
2nd Edition
ISBN: 9780393614077
Author: coppock, Lee; Mateer, Dirk
Publisher: W. W. Norton & Company
expand_more
expand_more
format_list_bulleted
Question
Chapter 28, Problem 4QFR
To determine
(a)
To list:
The three periods in which the U.S. budget deficits were relatively large.
To determine
(b)
To explain:
The historical events that took place in the United States during the budget deficit period of 1970s to the end of 2007.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
In 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.
Budget deficit is defined as the difference between government spending and tax revenues. As President Clinton once stated, dealing
with the budget deficit is simple "arithmetic". We need to cut government spending and increase tax revenues to lower the deficit.
1. If you are one of the policy makers determined to control the federal budget, which federal spending item(s) would you cut?
2. How would you change the tax policy to increase the tax revenue? Would you increase the income tax rate or decrease it to
increase revenue (review the Laffer curve and comment on the relationship between the tax rate and and tax revenue)? How would
you change the payroll tax? Who should have the burden of tax?
Please review the 2018 Trump tax law and Biden administrations tax proposals. Below are two short videos: One supports the tax
cuts, the other opposes.
Tax cuts will spark growth and employment (Laffer)
Six things we'll regret about Trump tax cuts
3. What is the impact of Covid-19 on the budget…
What is likely to happen to a country's
budget deficit if the government increases
spending without raising taxes during a
period of economic stagnation?
A. The budget deficit will decrease because
government spending will stimulate
economic growth.
B. The budget deficit will increase because
government spending exceeds tax revenue.
C. The budget deficit will remain unchanged
because the increase in government
spending is offset by increased tax revenue
from stimulated economic activity.
D. The budget deficit will turn into a budget
surplus because increased government
spending always leads to higher tax
revenues in the long run.
Chapter 28 Solutions
Principles of Economics (Second Edition)
Knowledge Booster
Similar questions
- Complete the following sentence. As it relates to fiscal policy, a budget deficit exists when:Choose one answer.a. the government receipts are greater than its expenditures. b. the government expenditures are greater than its receipts. c. the government expenditures are equal to its receipts. d. the national debt is less than the yearly revenue.arrow_forwardGovernment expenditures and the assessment of taxes is an issue that goes back to the origins of the United States. Why do legislators and other politicians choose to spend so much money? What is the federal deficit and how is it different from the national debt? What has happened recently to federal deficits and the national debt, and what are some risks associated with persistently high deficits and a large national debt?arrow_forwardWhen governments run budget deficits, how do they make up the differences between tax revenue and spending?arrow_forward
Recommended textbooks for you
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, IncEconomics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning