Considering the recent expenditure of governments across the world in providing vaccines free of cost to their respective citizens, we assume that government is facing a temporary budget deficit. Based on these circumstances and the additional difficulties due to the ongoing pandemic, please answer each of the following questions related to the country you have or will be speaking about during your presentation. Please write the equation for GDP to reflect a possible budget deficit. Now, based on the above situation, explain in your own words, how will the government for the country of your choice expect to address the situation or has already planned to reduce the budget deficit. Assume you are an investor in your country, how will the choice for investment change due to the expectation of government policy in your response for part (a) above? Explain with the help of a diagram as you feel appropriate.
Considering the recent expenditure of governments across the world in providing vaccines free of cost to their respective citizens, we assume that government is facing a temporary budget deficit. Based on these circumstances and the additional difficulties due to the ongoing pandemic, please answer each of the following questions related to the country you have or will be speaking about during your presentation. Please write the equation for GDP to reflect a possible budget deficit. Now, based on the above situation, explain in your own words, how will the government for the country of your choice expect to address the situation or has already planned to reduce the budget deficit. Assume you are an investor in your country, how will the choice for investment change due to the expectation of government policy in your response for part (a) above? Explain with the help of a diagram as you feel appropriate.
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 3SQ
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Considering the recent expenditure of governments across the world in providing vaccines free of cost to their respective citizens, we assume that government is facing a temporary budget deficit. Based on these circumstances and the additional difficulties due to the ongoing pandemic, please answer each of the following questions related to the country you have or will be speaking about during your presentation.
- Please write the equation for
GDP to reflect a possible budget deficit. Now, based on the above situation, explain in your own words, how will the government for the country of your choice expect to address the situation or has already planned to reduce the budget deficit. - Assume you are an investor in your country, how will the choice for investment change due to the expectation of government policy in your response for part (a) above? Explain with the help of a diagram as you feel appropriate.
- Assume the labor demand has been affected due to the pandemic and as per your choice in part (b) above, the wage rate will be impacted, how will this affect the GDP? Please explain in your own words with the help of a diagram.
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