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Economics: Private and Public Choice (MindTap Course List)
15th Edition
ISBN: 9781285453538
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 11, Problem 4CQ
To determine
Budget deficit, source to finance budget deficit, and Keynesian’s view on the impact of budget deficit on aggregate demand.
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Students have asked these similar questions
According to Keynesians, when should the federal government run a budget deficit and when should it run a surplus?
When the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy? Is it better to concentrate on aggregate demand or aggregate supply? Why?
According to Keynesians, when should the federal government run a deficit and when should it run a surplus?
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Economics: Private and Public Choice (MindTap Course List)
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- According to Keynesian economics, what impact would a balanced budget amendment to the constitution requiring the federal government to balance its budget annually have on the economy?arrow_forwardWhen the economy is in a recessionary mode, what will likely be the actions by government using fiscal policy?arrow_forwardWhat policy might the federal government implement with regard to taxes and spending to help stop the economy from falling into recession?arrow_forward
- Why does a balanced budget increase in spending and taxes increase aggregate demand?arrow_forwardHow would a Keynesian Economist use Fiscal Policy to fight a Recession? Please do not write about Monetary Policy here, only Fiscal Policy.arrow_forwardWhy tax cuts can increase both aggregate demand and aggregate supply?arrow_forward
- According to Keynesian economics, what impact would a balanced budget amendment to the constuition requiring the federal government to balance its budget annually have on the economy?arrow_forwardFrom 2008, how might monetary policy (as reflected in the OCR) have affected the degree of crowding out resulting from fiscal policy (as reflected in government expenditure)?arrow_forwardFrom a Keynesian point of view, which is more likely to cause a recession: aggregate demand or aggregate supply, and why?arrow_forward
- Why do Republicans like tax cuts? Why are tax cuts a good thing? How does it affect the aggregate supply and demand graph?arrow_forwardWhat is the Effects of Fiscal Policy on Real GDP and the Price Level?arrow_forwarda) Why can't the government run a budget deficit in a one- period macroeconomic model? b) Why are government transfer payments not included in (expenditure-based) GDP?arrow_forward
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