Question

When are larger deficits desirable?

Expert Solution

Want to see the full answer?

Check out a sample Q&A here
Blurred answer
Students who’ve seen this question also like:
Economics:
Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
Not helpful? See similar books
Economics:
Economics:
Fiscal Policy. 3E
marketing sidebar icon
Want to see this answer and more?
Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*
*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.

Related Economics Q&A

Find answers to questions asked by students like you.

Q: What are the the Costs and Benefits of Deficits?

A: The deficit is the situation when expenditure is higher than the revenues of an economy.

Q: If tax cuts don't cause enough economic growth,  we might also need to reduce expenditures to reduce…

A: Increase revenue or decrease spending are the two ways to reduce a budget deficit.  Tax cuts are…

Q: how much is the current primary deficit?

A: Primary deficit = fiscal deficit - interest payments Primary deficit = government expenditure (…

Q: How does tax cuts encourage saving and investment

A: Tax reduce the personal disposable income of an individual which leads to reductions in savings and…

Q: How do we reduce the national debt and still stimulate business growth?

A: National debt: It refers to the amount which is owned by the government from its creditors. It is…

Q: What are primary deficit?

A: # In economics the term deficit means shortfaling.  This happens mainly when the expenses are more…

Q: What are implications for a government running deficits?How could that be effectively addressed?What…

A: The economies around the world tend to focus on enhancing their economic growth in a way that  it…

Q: What is meant by revenue deficit and what does it indicate

A: There are three main deficit of any government which are:- (1) Revenue deficit (2) Fiscal deficit…

Q: what are the conventional and unconverntional ways to reduce a deficit and what are the related…

A: Budget deficit happens when the income/revenue of the government falls short of its expenses.

Q: How does tax cuts encourage savings and investment

A: Since there is inverse relationship between the willingness to work and tax rate.

Q: What is a budget deficit? How does it affect interest rates, investments and economic growth?

A: Budget deficits happen when spending is greater than revenue and signify the financial strength of a…

Q: What is a budget deficit? How does it affect interest rates, investments and economic growth?

A: A budget is a financial document or the financial plan of an economy which includes the planned…

Q: if us decides to cover the budget deficit through money creation, what are the impacts?

A: Budget deficit is a situation where expenditure is higher than income. But covering expenditure…

Q: How will you identify budget deficits?

A: Budget deficit is a negative budget balance, where Budget balance = Tax revenue - Government…

Q: using macroeconomic issues, what are three ways national debt affect economic growth?

A: The production of the goods and services which is maintained on the sustainable basis is called the…

Q: Sketch a diagram of how sustained budget deficits cause low economic growth.

A: To start with, other things equal, fiscal deficit lessen public/national saving and future national…

Q: What are some of the ways fiscal policy might encourage economic growth?

A: Fiscal policy is a macroeconomic policy that is implemented by the government for monitoring and…

Q: nts, critically analyze how national debt can affect the economic prosperity of a country.

A: As humans developed, there was a need for a subject that would divide economics in an efficient…

Q: Can government spending that causes crowding out be detrimental to long-run economic growth?

A: Crowding out is basically based on the idea that the fiscal policy by the government leads to a…

Q: If you were the Prime Minister of Malaysia, what would you do to reduce the fiscal deficit of the…

A: In Malaysia, it can be seen that the debt to GDP ratio is very high due to which government is…

Q: Is it a good policy for the government to create budget deficit?  Why and why not?

A: The government is creating a budget deficit in order to stimulate the aggregate demand. To boost the…

Q: What happens to the following variables during an expansion? a.  government budget deficits…

A: The economic activities will boost during the expansionary phase of a business cycle. As a result,…

Q: One objection to deficit spending is that it increases the demand for loanable funds thereby putting…

A: Demand curve for the loanable fund shows the level of demand for loan at different interest rate.…

Q: What are the budget deficits

A: Budget- It is a financial plan for a particular time period.

Q: The following graph shows the market for loanable funds in Aperto, a large open economy. The…

A: When the government influence the economic outcome by changing the tax or its spending or both then…

Q: Suppose that Antonio, an economist from a business school in Georgia, and Caroline, an economist…

A: The disagreement between these economists is most likely due to Difference of opinion.

Q: Analyze the challenges that the US economy is facing to reduce the deficit

A: The challenges that the US economy is facing to reduce the deficit are the slow growth, lower…

Q: What are some economic policies (fiscal AND monetary) that should be enacted to stabilize the…

A: The following problem has been solved as follows:

Q: How does fiscal policy help the Philippine economy?

A: The government's tax and expenditure policies are referred to as fiscal policies. There are two…

Q: Answer the question completely: 1. How can fiscal policy promote economic growth and development?

A: Economic growth, outlined as a rise in people's real financial gain, indicates that the quantitative…

Q: In 2010 the Greek government had to inform the European Commission on how it would control its…

A: Govt in budget deficit means the total expenditure of the govt. is higher than the total revenue of…

Q: Suppose that Edison, an economist from a research institute in Texas, and Hilary, an economist from…

A: The disagreement is because of the different opinions about Laffer curve. Laffer curve is given by…

Q: extent of 7%, calculate the real deficit in that country. Show your calculations.

A: Given - Nominal deficit  = $14 billion               Debt - $29 billion              inflation - 7%…

Q: (c) Describe what would happen if the government tried to eliminate its budget deficit by…

A: Y = C + I + G  C = a + b(Y - T) T = tY a = 20 b = 0.75 t = 0.25 I = 100 G = 240 C = a + b(Y - T) C =…

Q: What are examples of stimulus package?

A: When the economy is suffering from slow-down or recessions, the governments often introduce policies…

Q: The capital spending is?

A: The capital spending is the sum of money incurred by business entities to acquire a new or upgrade…

Q: How could the government lower the federal deficit?

A: A government deficit occurs when the spending (subsidies, pensions, infrastructure, and other…

Q: Consider the following data (in billion $) for a country in a particular year: (assume this country…

A: Click to see the answer

Q: Assume there is no discretionary increase in government spending. Explain how an improving economy…

A: Click to see the answer

Q: Assume there is no discretionary increase in government spending. Explain how an improving economy…

A: Government spending refers to the expenditure made on the public sector by the government which…

Q: In view of the large adverse impact of COVID-19 on the world economy, many governments have…

A: The condition when the government expenditure exceeds the revenues, it brings a deficit in the…

Q: Is debt good for the Pakistani economy?  Discuss pros and cons in light of theory.

A: Pakistan has been facing a debt crisis since long and it is one of the major challenges concerning…

Q: Is debt good for the Pakistani economy?  Discuss pros and cons in light of theory.

A: No, the debt is not good for the Pakistani economy as the negative effect is more than the positive…

Q: The following transactions took place in Ecoland in 2019: Trillions of 2015 dollars Government…

A: As per the policy , I can solve the first three subparts for you. Part a) GDP in 2015 = C + I + G +…

Q: What is the best combination of fiscal policies and monetary policies for a country like Japan whose…

A: The aggregate demand (AD) and aggregate supply (AS) model explains the marker equilibrium where the…

Knowledge Booster
Economics
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
  • Economics:
    Economics
    ISBN:9781285859460
    Author:BOYES, William
    Publisher:Cengage Learning
    Economics (MindTap Course List)
    Economics
    ISBN:9781337617383
    Author:Roger A. Arnold
    Publisher:Cengage Learning
    Macroeconomics
    Economics
    ISBN:9781337617390
    Author:Roger A. Arnold
    Publisher:Cengage Learning
  • Principles of Economics 2e
    Economics
    ISBN:9781947172364
    Author:Steven A. Greenlaw; David Shapiro
    Publisher:OpenStax
  • Economics:
    Economics
    ISBN:9781285859460
    Author:BOYES, William
    Publisher:Cengage Learning
    Economics (MindTap Course List)
    Economics
    ISBN:9781337617383
    Author:Roger A. Arnold
    Publisher:Cengage Learning
    Macroeconomics
    Economics
    ISBN:9781337617390
    Author:Roger A. Arnold
    Publisher:Cengage Learning
    Principles of Economics 2e
    Economics
    ISBN:9781947172364
    Author:Steven A. Greenlaw; David Shapiro
    Publisher:OpenStax