Macroeconomics: Principles, Problems, & Policies
20th Edition
ISBN: 9780077660772
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 5, Problem 5RQ
To determine
Unfunded liabilities.
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________________________ making a series of future expenditures without simultaneously committing to collect enough tax revenues to pay for those expenditures. a. Budget deficits b. Debt crises c. Loan guarantees d. Unfunded liabilities
component of the budget.
3ldentify the impact that each of the following changes in fiscal policy would
have on the level of economic growth.
a) A reduction in the budget deficit from $200 billion last year to $150 billion
this year
b) An unchanged budget surplus of $12 billion last year and this year
c) A shift from a $15 billion deficit last year to a balanced budget this year.
PrtScn
F8
Home
F9
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F5
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Large budget deficits __________.
a.)
reduce the value of domestic currency
b.)
help alleviate the national debt
c.)
occur when tax revenues are greater than government spending
d.)
Decrease the interest rate
Chapter 5 Solutions
Macroeconomics: Principles, Problems, & Policies
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- Text Problem 14-2 Question Help v Suppose that the Office of Management and Budget provides the accompanying estimates of federal budget receipts, federal budget spending, and GDP, all expressed in billions of dollars. Calculate the implied estimates of the federal budget deficit as a percentage of GDP for each year. (Enter each response as a percentage rounded to one decimal place. Do not include a plus or minus sign.) Federal Budget Receipts (2% growth) $2,329.8 Federal GDP Deficit as a % Budget Spending (5% growth) $2,682.6 Year (3% growth) $14,573.2 of GDP 2019 2020 2,376.4 2,816.7 15,010.4 % 2021 2,423.9 2,957.6 15.460.7 2022 2,472.4 3,105.4 15.924.5arrow_forward3********************* 3)List the five most powerful changes to fiscal policy that you would propose for the United States that you would like to see implemented that would reduce our debt-to-GDP ratio and put the country on a fiscally sustainable path to the future.arrow_forward(b) Malaysia's fiscal deficit to rise to level seen during global financial crisis KUALA LUMPUR - Malaysia's fiscal deficit for 2021 should hit a level similar to that seen during the global financial crisis more than a decade ago, according to the government's first-ever pre-budget statement. Released on Tuesday (Aug 31), the country's Independence Day, the pre-budget statement showed the fiscal deficit reaching between 6.5 per cent and 7 per cent for 2021, higher than the 5.4 per cent initially estimated. The deficit reached 6.7 per cent during the 2008-2009 global financial crisis. Malaysia's economy has been battered since a budget projection was first made late last year, with the country beset by surging Covid-19 infections and repeated lockdowns for much of the year. Analyze the impact of the government budget deficit on Malaysia's open economy. Include a three-panel diagram, the market for loanable funds, net capital outflow and the market for foreign currency exchange to…arrow_forward
- _______ The total of all federal deficits is calleda. depression.b. fiscal policy.c. gross domestic product.d. national debt.e. business cyclearrow_forward10) Fiscal policy is defined as changes in federal ________ and ________ to achieve macroeconomic objectives such as price stability, high rates of economic growth, and high employment. A) taxes; interest rates B) taxes; expenditures C) interest rates; money supply D) taxes; money supplyarrow_forward3) A decrease in taxes should be applied in a situation with a recessionary gap. an inflationary gap. low unemployment. high demand for goods and services. 4) If the economy has been producing at a point where real GDP is less than potential GDP, what fiscal policy can the federal government use to restore real GDP to potential GDP? cut government expenditure on goods and services. increase taxes. taxes. raise the interest rate.arrow_forward
- D4) country’s GDP growth rate is 6%, the interest rate on its debt (all local currency) is 8%, and its debt-to-GDP ratio is 95%. What does the country have to do to keep its debt-to-GDP ratio below 100%? Group of answer choices Keep its primary deficit below 8.05% of GDP Run a primary surplus of 8.05% of GDP. Bring its primary deficit down to zero. Raise its GDP growth rate to 8%.arrow_forward34) If the budget deficit is lower than it was last year, we could say that A) the general government debt will fall. B) other things being equal, the level of aggregate demand will be higher than it was last year. C) other things being equal, the level of aggregate demand will be lower than it was last year. D) the government must have an expansionary fiscal stancearrow_forward1. Why fiscal administrations important in government?arrow_forward
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