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- How would a balanced budget amendment affect a decision by Congress to grant a tax cut during a recession?What would happen if expansionary fiscal policy was implemented in a recession but, due to lag, did not actually take effect until after the economy was back to potential GDP?In a recession, does the actual budget surplus or deficit fall above or below the standardized employment budget?
- Debt has a certain self-reinforcing quality to it. There is one category of government spending that automatically Increases along with the federal debt. What Is It?Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?Explain how cuts in funding for programs such as Head Start might affect the development of human capital in the United States.
- Why do legislators vote for spending projects in districts that are not their own?True or False: Federal spending has grown substantially in recent decades. By world standards, the U.S. government controls a relatively large share of the U.S. economy. A majority of the federal governments revenue Is collected through personal income taxes. Education spending is slightly larger at the federal level than at the state and local level. State and local government spending has not risen much in recent decades. Defense spending is higher now than ever. The share of the economy going to federal taxes has increased substantially over time. Foreign aid is a large portion, although less than half, of federal spending. Federal deficits have been very large for the last two decades. The accumulated federal debt as a share of GDP is near an all-time high.Suppose that gifts were taxed at a rate of 10 for amounts up to 100,000 and 20 for anything over that amount. Would this tax be regressive or progressive?
