Assume a government decides to implement a new tax policy, resulting in a smaller budget deficit. Based on the national savings and investment identity, this would result in some combination of private investment, private savings, and/or trade deficit. A-Higher; lower; higher B-Higher; lower; lower C-Lower; higher; higher D-

Assume a government decides to implement a new tax policy, resulting in a smaller budget deficit. Based on the national savings and investment identity, this would result in some combination of private investment, private savings, and/or trade deficit. A-Higher; lower; higher B-Higher; lower; lower C-Lower; higher; higher D-

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 17SCQ: For each of the following, indicate which type of government spending would justify a budget deficit...

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For each of the following, indicate which type of government spending would justify a budget deficit and which would not. Increased federal spending on Medicare Increased spending on education Increased spending on the space program Increased spending on airports and air traffic control
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Assume a government that runs consecutive budget deficits and trade surpluses. They decide to implement a new tax policy, resulting in a budget surplus. Everything else equal, what is the impact of that new budget surplus in private investment, private savings, and trade surplus, respectively? Group of answer choices Rises, falls, rises Rises, falls, falls Falls, rises, rises Falls, rises, falls
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