The Focus box “Can a Budget Deficit Reduction Lead to an Output Expansion? Ireland in the 1980s” provides an example of fiscal consolidation. Ireland had a large budget deficit in 1981 and 1982. Although the data shows strong output growth from 1987 to 1989, there is some evidence of continued macroeconomic weakness in Ireland during the second fiscal consolidation. What is that evidence?

The Focus box “Can a Budget Deficit Reduction Lead to an Output Expansion? Ireland in the 1980s” provides an example of fiscal consolidation. Ireland had a large budget deficit in 1981 and 1982. Although the data shows strong output growth from 1987 to 1989, there is some evidence of continued macroeconomic weakness in Ireland during the second fiscal consolidation. What is that evidence?

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 1SQ

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Similar questions

Analyze fiscal policy in order the generate macroeconomic stability.
Which of the following illustrates the effectiveness lag? A.Policymakers implement contractionary fiscal policy but it will be a few months before it starts working. B.Policymakers believe an economic downturn has occurred, but they decide not to take action until they are sure. C.Policymakers first learn of the recession when it is five months old. D.Policymakers agree to increase taxes, but it will be at least two months before the policy is implemented.
If stability of the economy is the primary objective of Fiscal Policy, then an Annually Balanced Budget (Government Expenditures = Tax Revenues) is the best policy approach. True or False?
Amid an economic recession, a government decides to implement an expansionary fiscal policy. This policy includes increasing government spending on infrastructure projects and reducing taxes to stimulate demand and create jobs. While the policy aims to boost economic activity, it also risks increasing the national debt and potentially leading to higher inflation. In this scenario, the primary objective of the expansionary fiscal policy is to: ) Reduce government spending and increase taxes A B) Stimulate economic activity and job creation C) Focus solely on long-term economic growth D) Increase the national debt and inflation
Refer to the above diagram. The economy is at equilibrium at point C. What fiscal policy would increase real GDP? Group of answer choices Increase aggregate demand from AD2 to AD1 by decreasing taxes. Decrease aggregate demand from AD2 to AD3 by increasing taxes. Increase aggregate demand from AD1 to AD2 by increasing government spending. Make no change because the economy is at or near its full-employment level of real output.
Explain your decision making regarding government expenditure and how it changed based on the macroeconomic conditions. What was the intent of your fiscal policy decisions in response to the given economic climate? Evaluate your fiscal policy decisions, including how they impacted key macroeconomics factors such as real GDP growth and unemployment. To what extent did your policies yield positive or negative outcomes? Refer to the AD/AS model to support your analysis in this section of your report.
Amid an economic recession, a government decides to implement an expansionary fiscal policy. This policy includes increasing government spending on infrastructure projects and reducing taxes to stimulate demand and create jobs. While the policy aims to boost economic activity, it also risks increasing the national debt and potentially leading to higher inflation. In this scenario, the primary objective of the expansionary fiscal policy is to: A) Reduce government spending and increase taxes B) Stimulate economic activity and job creation C) Focus solely on long-term economic growth D) Increase the national debt and inflation Explain all options pls