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- During the Great Recession of 20082009, what actions would have been required of Congress and the President had a balanced budget amendment to the Constitution been ratified? What impact would that have had on the unemployment rate?Under what general macroeconomic circumstances might a government use expansionary fiscal policy? When might it use contractionary fiscal policy?In a recession, does the actual budget surplus or deficit fall above or below the standardized employment budget?
- 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?Discuss the government’s use of discretionary fiscal policy in controlling economic fluctuations.How does the government budget process impact fiscal policy decisions, and what are the potential consequences of budget deficits and surpluses? A) The government budget process has no bearing on fiscal policy decisions. B) The government budget process involves decisions about government spending and taxation; budget deficits occur when spending exceeds revenue, while surpluses occur when revenue exceeds spending. Deficits may lead to increased borrowing and interest payments, while surpluses can reduce government debt. C) The government budget process exclusively focuses on taxation and has no relation to spending. D) Budget deficits always lead to economic stability.
- 1. Critically explain why governments use the expansionary fiscal policy.What are problems that governments may encounter in enacting and applying fiscal policy? Explain the effectiveness of the recent U.S. fiscal policy.What budget changes would have to occur in order to lower an annual deficit? Annual expenditures would have to rise. Annual expenditures would have to decline and annual tax collections would have to rise. Annual tax collections would have to fall. Annual expenditures would have to rise and annual tax collections would have to fall.
- Define the term fiscal policies and explain the government's government role in developing fiscal policies.Which of the following sentences correctly describes the budget of the Federal Government of the Unites States during the past six decades? A. Since 1961, the Government always runs in budget deficits, meaning it spends more money than it receives every year – except for the brief period of 1998 to 2001. B. Since 1961, the U.S. Government has been an example of how to run a country on a balanced budget, meaning it balances the level of spending with the level of tax revenue. C. Since 1961, the Government always runs in budget surpluses, meaning it receives more money than it spends every year – except for the brief period of 1998 to 2001. D. Since 1961, the Government budget doesn’t show a clear trend. About half of the time, the U.S. incurs budget deficits; to compensate for that, the Government runs budget surpluses half of the time too.
