Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280601
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Question
Chapter 16, Problem 2DQ
To determine
To describe: The condition if there is continuous increase in the deficit of the nation.
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Students have asked these similar questions
Debt is
the same as the deficit.
good if it increases productivity more than the debt payment.
increased by a budget surplus.
bad in all cases.
Government expenditures and the assessment of taxes is an issue that goes back to the origins of the United States. Why do legislators and other politicians choose to spend so much money? What is the federal deficit and how is it different from the national debt? What has happened recently to federal deficits and the national debt, and what are some risks associated with persistently high deficits and a large national debt?
How budget deficits and national debt are defined?
Is it a good policy for the government to create budget deficit? Why and why not?
Chapter 16 Solutions
Macroeconomics: Principles and Policy (MindTap Course List)
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Similar questions
- 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 controlarrow_forwardIn which of the following cases does the size of the government’s debt and deficit indicate potential problems for the economy? Explain your answer. a) The government’s debt is relatively low, but the government is running a large budget deficit as it builds a high-speed rail system to connect the major cities of the nation. b) The government’s debt is relatively high due to a recently ended deficit-financed war, but the government is now running only a small budget deficit. c) The government’s debt is relatively low, but the government is running a budget deficit to finance the interest payments on the debt. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardHow does the federal government finance a budget deficit? It prints more money. It purchases U.S. Treasury bonds. It cuts spending on entitlement programs. It borrows funds by selling Treasury bonds.arrow_forward
- How can the United States National Debt be Reduced"arrow_forwardEconomic Deficit spending is a way of _____ Select one: a. billing future taxpayers for future spending. b. billing future taxpayers for current spending. c. billing current taxpayers for future spending. d. billing current taxpayers for current spending. e. suddenly increasing the investment flows in the economy.arrow_forward(Government Debt) The U.S. Treasury reports the budget deficit or surplus of the federal government. Give at least one reason why the measured budget deficit might overstate the "true" deficit and at least one reason the measured figure might understate the "true" deficit.arrow_forward
- Suppose that the government of Smallville spends $2 trillion in 2020 and receives tax revenues of $1.5 trillion in that same year. Which of the following is TRUE? Smallville has a trade surplus of $0.5 trillion. Smallville has a trade deficit of $0.5 trillion. Smallville has a budget surplus of $0.5 trillion. Smallville has a budget deficit of $0.5 trillion. tarrow_forwardLook into the current level of the national debt and the federal deficit in the U.S. Pick any government program and research how much the U.S. spends on it. Does the amount surprise you? What might happen if the budget for the program were increased or reduced? Should the current deficit and debt be cut down? What would be some pros and cons of reducing them?arrow_forwardExplain and expand on How does fiscal discipline help businesses to grow in an economy?arrow_forward
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