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- Describe how a plan for reducing the government deficit might affect a college student, a young professional, and a middle-income family.For each of the following, indicate which type of government spending would justify a budget deficit and which would not. Increased federal spending on Medicare Increased spending on education Increased spending on the space program Increased spending on airports and air traffic controlWhen is a trade deficit likely to work out well for an economy? When is it likely to work out poorly?
- Assume that in 2010, a country had a GDP of $500$500 billion, a budget deficit of $6$6 billion, and a trade deficit of $10$10 billion. In five years, the budget deficit became $4.0$4.0 billion, and the trade deficit as a percentage of GDP changed by 0.70.7 percentage point(s). GDP remained unchanged.Calculate the dollar value of the trade deficit in 2015.How could a greater budget deficit increase the trade deficit? What happens to the multiplier if there is an increase in the marginal propensity to consume? What would likely happen to the level of economic activity if the government took the necessary steps to reduce the deficit significantly in a relatively short period of time? When is the most appropriate time to reduce the deficit?Find the revenue deficit???
- what combination of fiscal and monetary policies do you think it will take for The United States to fix the debt deficitExplain the expansionary fiscal policy in the short run and long run (ignoring exchange rate and capital flows).Why are budget deficits and trade deficits sometimescalled the twin deficits?
