Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 30, Problem 25APA
To determine
Explain the challenges of fiscal stimulus.
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Briefly analyse the various policy measures that a government might have to undertake to deal with and finance a growing fiscal deficit
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In the fiscal year 2019, the projected U.S. federal government deficit totaled $960 billion, which is 23.2 percent higher
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During Fiscal 2018 and Fiscal 2019, the national debt
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billion.
U.S. budget deficit widens
In the fiscal year 2019, the projected U.S. federal government deficit totaled $960 billion, which is 23.2 percent higher
than a year earlier.
Source: Congressional Budget Office, August 21, 20
Given the information in the news clip, what was the total change in U.S. national debt during the fiscal years 2018
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The budget deficit in 2018 was $ billion.
Chapter 30 Solutions
Macroeconomics
Ch. 30.1 - Prob. 1RQCh. 30.1 - Prob. 2RQCh. 30.1 - Prob. 3RQCh. 30.1 - Prob. 4RQCh. 30.1 - Prob. 5RQCh. 30.2 - Prob. 1RQCh. 30.2 - Prob. 2RQCh. 30.2 - Prob. 3RQCh. 30.2 - Prob. 4RQCh. 30.2 - Prob. 5RQ
Ch. 30.3 - Prob. 1RQCh. 30.3 - Prob. 2RQCh. 30.3 - Prob. 3RQCh. 30.3 - Prob. 4RQCh. 30.3 - Prob. 5RQCh. 30.4 - Prob. 1RQCh. 30.4 - Prob. 2RQCh. 30.4 - Prob. 3RQCh. 30.4 - Prob. 4RQCh. 30.4 - Prob. 5RQCh. 30 - Prob. 1SPACh. 30 - Prob. 2SPACh. 30 - Prob. 3SPACh. 30 - Prob. 4SPACh. 30 - Prob. 5SPACh. 30 - Prob. 6SPACh. 30 - Prob. 7SPACh. 30 - Prob. 8SPACh. 30 - Prob. 9SPACh. 30 - Prob. 10SPACh. 30 - Prob. 11SPACh. 30 - Prob. 12APACh. 30 - Prob. 13APACh. 30 - Prob. 14APACh. 30 - Prob. 15APACh. 30 - Prob. 16APACh. 30 - Prob. 17APACh. 30 - Prob. 18APACh. 30 - Prob. 19APACh. 30 - Prob. 20APACh. 30 - Prob. 21APACh. 30 - Prob. 22APACh. 30 - Prob. 23APACh. 30 - Prob. 24APACh. 30 - Prob. 25APACh. 30 - Prob. 26APACh. 30 - Prob. 27APACh. 30 - Prob. 28APA
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- The U.S. government has shut down a number of times In recent history Explain how a government shutdown will affect the variables In the national Investment and savings identity Could the shutdown affect the government budget deficit?arrow_forwardSpecify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and sketch a diagram using aggregate demand and aggregate supply curves to illustrate your answer: A recession. A stock market collapse that hurts consumer and business confidence. Extremely rapid growth of exports. Rising inflation. A rise in the natural rate of unemployment. A rise in oil prices.arrow_forwardWhat is the main reason for employing contractionary fiscal policy in a time of strong economic growth?arrow_forward
- What is the main reason for employing expansionary fiscal policy during a recession?arrow_forwardDuring the most recent recession, some economists argued that the change in the interest rates that comes about due to deficit spending implied in the demand and supply of financial capital graph would not occur. A simple reason was that the government was stepping in to invest when private firms were not. Using a graph, explain how the use by government in investment offsets the deficit demand.arrow_forwardBriefly discuss the effects of time lags in relation to fiscal policy, including: a comparison to monetary policy, what the level of fiscal policy will be, and its effect on fiscal policy during recession.arrow_forward
- economic The hypothetical information in the following table shows what the situation will be in 2016 if the government does not use fiscal policy: table (image) a. If the government wants to move real GDP to its potential level in 2016, should it use expansionary policy or contractionary policy? In your answer make sure you explain whether the government should be increasing or decreasing government purchases and taxes.b. If the government is successful in moving real GDP to its potential level in 2016, state whether each of the following will be higher, lower or the same as it would have been if they had taken no action: i. Real GDP ii. Potential GDP iii.The inflation rate iv.The unemployment rate.c. Draw a dynamic aggregate demand and aggregate supply graph to illustrate your answer. Make sure that your graph contains LRAS curves for 2015 and 2016; SRAS curves for 2015 and 2016; AD curves for 2015 and 2016, with and without fiscal policy action; and equilibrium real GDP and theā¦arrow_forwardSummarize MMT in one sentence. Why should federal debt be thought of differently than household debt? If fiscal budgets donāt need to balance, what should we be trying to balance in an economy? Explain how a government deficit is societyās surplus. If we donāt care about the size of the ādeficitā, then is there NO limit on government spending? How does MMT advise that the above problem be handled?arrow_forward
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