Answered: Answer Bank when the government…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter31: The Impacts Of Government Borrowing

Section: Chapter Questions

Problem 18CTQ: The U.S. government has shut down a number of times In recent history Explain how a government...

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Please match each description with the appropriate approach to federal finance.

Policymakers should reduce spending and increase taxes when the economy is growing
in order to prevent "overheating".

This approach was considered conventional wisdom until the advent of the
Great Depression.

Policymakers should focus on keeping unemployment low and providing the people
with the public goods and services they want.

If insisted upon, this approach would only worsen the economy during a recession.

This approach ignores the impact of the budget on the business cycle.

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Answer Bank
when the government receives more in taxes than it spends in a given time period
when government spending and taxes are equal
when the federal government spends more than it collects in taxes in a given time period
the total accumulated amount that the government has borrowed and not yet paid back over time

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