How do economists distinguish between the absolute and relative sizes of the public debt? Why is the distinction important? Distinguish between refifinancing the debt and retiring the debt. How does an internally held public debt differ from an externally held public debt? Contrast the effects of retiring an internally held debt and retiring an externally held debt.

Q: How could the government deal with the crowding out effect generated from applying the expansionary…

A: Crowding out effect occurs when the increase in spendings or investment by the government crowds out…

Q: Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion…

A: a) Absolute value of public debt = Deficit in year 1 + Deficit in year 2 - Surplus in year 3 +…

Q: Explain the concept of Fiscal Policy

A: Definition of Fiscal Policy: Fiscal policy is a policy of government to control the economy through…

Q: Question 8 What is meant by the "National Debt?" Explain why the "National Debt" has been both…

A: 8) National debt implies the loans or borrowings by the government of the country. It can be owed to…

Q: Why is it important to consider the debt-to-GDP ratio rather than just the absolute amount of the…

A: The measure used to compare a nation's public debt to its gross domestic product is called the…

Q: Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion…

A: In year 1, Budget deficit = $40 billion  in year 2, budget surplus = $10 billion  In year 3, budget…

Q: Discuss one likely affect of fiscal policy financed via the accumulation of additional government…

A: Fiscal policy is related to government spending and use of taxes as well as subsidies for the…

Q: Public debt is the sum of deficits and surpluses (negative deficits) over time. Suppose that a…

A: Given the budget deficit in the first year = $40 billion The budget deficit in the 2nd year = 20…

Q: Do you believe the traditional or the Ricardian view of government debt? Justify your response?

A: The traditional view of government debt assumes that when the government lowers taxes and runs a…

Q: The Government Debt Limits in USA is a hot topic, currently being debated in Congress. Should the…

A: The national debt level has been a huge subject of debate for U.S. domestic policy. Given the…

Q: Assume that the total federal debt is equal to $3 trillion.  Suppose now that the government runs a…

A: A budget deficit is a negative balance of budget that occurs when the government expenditures…

Q: Explain how automatic stabilizers work, both on the taxation side and on the spending side, first in…

A: Automatic stabilizers are economic parameters that act automatically to counter the fluctuations in…

Q: Explain what crowding out is and why it reduces the impact of fiscal stimulus.

A: The government adopts fiscal policy to regulate the economy. In this, the government increases its…

Q: Explain the Expansionary and Contactionary Fiscal Policy with the help of diagram.

A: Fiscal policy is used by the central government of the country or finance ministry of the country to…

Q: budget deficit and national debt.

A: Budget deficit: It is the difference between total receipts & expenditure in both revenue &…

Q: Is it possible for a country to have a headline fiscal deficit and a primary fiscal surplus? Explain…

A: In an economy, headline fiscal deficit is the government over expenditure when receipts are less…

Q: What two factors could reduce the net economic burden that might be shifted to future generations…

A: find below the answer.

Q: Suppose that a country has no public debt in year 1 but experiences a budget deficit of $30 billion…

A: Public debt is the sum of deficits and surpluses (negative deficits) over time.

Q: Explain the theory that crowding out can weaken or nullify the effect of expansionary fiscal policy…

A: Expansionary fiscal policy is used to shift the aggregate demand curve right. This is usually done…

Q: How does the Expansionary and Contractionary Fiscal Policy affect the Inflation, GDP, Economic…

A: The government uses fiscal policy to increase or decrease the aggregate output. It can increase or…

Q: The total public debt is more revelant to an economy than the public debt as a percentage of GDP. An…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Which of these is MOST LIKELY to occur after the government increases taxes?   A.) Consumer…

A: When taxes are increased, consumers' spending reduces as disposable income falls. Consumers are left…

Q: Explain each of the tools that exist in expansionary fiscal policy and contractionary fiscal policy.

A: Fiscal policy is the use of government spending and taxation to adjust the economy. It is a method…

Q: Why is identifying potential opportunities, and managing within predictable limits for fiscal policy…

A: Fiscal policy is an important tool for dealing with the economy on account of its capacity to…

Q: List what specific, deliberate actions the federal government could take to enact expansionary…

A: Expansionary fiscal policy is aimed at increasing aggregate demand when the economy is in a…

Q: Explain the objectives of  the fiscal policy.

A: In an economy, fiscal policy refers to the government action and it's intervention in the market by…

Q: Suppose that a country has no public debt in year 1 but experiences a budget deficit of $ 40 billion…

A: Public debt is the amount of money borrowed by the government. It is the amount that the country…

Q: Define the term fiscal policies and explain the government's government role in developing fiscal…

A: Fiscal policy is defined as the decision taken by the government to control the level of its…

Q: Evaluate the economic impact of current and future Federal budget

A: A budget process refers to the mechanism by which a budget is generated and approved by government.

Q: List and distinguish the three major fiscal function

A: The employment of taxation and expenditure of the government to impact the economy is known as…

Q: Explain the essence of fiscal policy and how it realized! Explain causes and consequences of budget…

A: Fiscal policy is the use of government revenue collection and expenditure to influence a nation's…

Q: lesae explain briefing what policy and implementation lags affect the potency of fiscal policy, and…

A: How fiscal policy works The use of taxation and government spending to impact the economy is…

Q: explain the impact of balanced budget on national debt

A: Primarily. lets clear on two basic concepts that will be used in the question under consideration:…

Q: Public debt is the sum of deficits and surpluses (negative deficits) over time. Suppose that a…

A: Real GDP is the inflation-adjusted measure of the value of all goods and services produced in a…

Q: What are the three general options available to the U.S. to begin to reduce the relative size of our…

A: National debt occurs when US government is spending more than it is able to earn. It is the level of…

Q: What is the difference between debt and deficit? Explain why there is no time lag for automatic…

A: Deficit is the difference b/w the amount that is received and what is spent by the government of a…

Q: Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion…

A: Public debt, year 4($ billion) = Public debt year 1 + Budget deficit, year 2 + Budget deficit, year…

Q: Give a numerical example and illustrate the difference between complete crowding out, incomplete…

A: Crowding out is a situation in which an increase in government spending or investment causes a drop…

Q: Explain how governments need to recognise the impact of several time lags as a problem in fiscal…

A: Changes the government makes to spending or taxing in an effort to affect the state of the economy…