Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 23, Problem 17SCQ
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 control
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Which of the following may not be associated with a deficit?
Select one:
a. A need to increase borrowings
b. Less foreign investment In the deficit economy
c. Increased imports
d. Lesser capital inflows
e. Increased exports
Which of the following economic reasoning behind the twin deficit theory is not correct?a. According to the national income accounting, if private saving and investment stay constant, a government budget deficit can cause a trade deficit by reducing national saving. b. Government budget deficits (due to expansionary fiscal policy) and trade deficits during the 1980s and early 2000s in the US are the cases of the twin deficits.c. The chain of causality can work in a reverse way: a smaller fiscal deficit leads to a smaller trade deficit, other things being equal.d. All of the above are correct.
Future U.S. deficits could be decreased by
options:
increasing transfer payments and decreasing interest payments on the debt
increasing government expenditures and decreasing taxes
decreasing current and future taxes
decreasing government expenditures and increasing taxes
Chapter 23 Solutions
Principles of Economics 2e
Ch. 23 - If foreign investors buy more U.S. stocks and...Ch. 23 - If the trade deficit of the United States...Ch. 23 - State whether each of the following events...Ch. 23 - In what way does comparing a countrys exports to...Ch. 23 - At one point Canadas GDP was 1,800 billion and its...Ch. 23 - The GDP for the United States is 18,036 billion...Ch. 23 - Why does the trade balance and the current account...Ch. 23 - State whether each of the following events...Ch. 23 - How does the bottom portion of Figure 23.3,...Ch. 23 - Explain the relationship between a current account...
Ch. 23 - Using the national savings and Investment...Ch. 23 - If a country is running a government budget...Ch. 23 - What determines the size of a countrys trade...Ch. 23 - If domestic Investment increases, and there is no...Ch. 23 - Why does a recession cause a trade deficit to...Ch. 23 - Both the United States and global economies are...Ch. 23 - For each of the following, indicate which type of...Ch. 23 - How did large trade deficits hurt the East Asian...Ch. 23 - Describe a scenario in which a trade surplus...Ch. 23 - The United States exports 14 of GDP while Germany...Ch. 23 - Explain briefly whether each of the following...Ch. 23 - If imports exceed exports, is it a trade deficit...Ch. 23 - What is included in the current account balance?Ch. 23 - In recent decades, has the U.S. trade balance...Ch. 23 - Does a trade surplus mean an overall inflow of...Ch. 23 - What are the two main sides of the national...Ch. 23 - What are the main components of the national...Ch. 23 - When is a trade deficit likely to work out well...Ch. 23 - Does a trade surplus help to guarantee strong...Ch. 23 - What three factors will determine whether a nation...Ch. 23 - What is the difference between trade deficits and...Ch. 23 - Occasionally, a government official will argue...Ch. 23 - A government official announces a new policy. The...Ch. 23 - If a country is a big exporter, is it more exposed...Ch. 23 - If countries reduced trade barriers, would the...Ch. 23 - Is it better for your country to be an...Ch. 23 - Many think that the size of a trade deficit is due...Ch. 23 - If you observed a country with a rapidly growing...Ch. 23 - Occasionally, a government official will argue...Ch. 23 - What is more important, a countrys current account...Ch. 23 - Will nations that are more involved in foreign...Ch. 23 - Some economists warn that the persistent trade...Ch. 23 - In 2001, the United Kingdoms economy exported...Ch. 23 - Imagine that the U.S. economy finds itself in the...Ch. 23 - Table 23.7 provides some hypothetical data on...Ch. 23 - Imagine that the economy of Germany finds itself...
Additional Business Textbook Solutions
Find more solutions based on key concepts
What is an internai change order and how is it used?
Construction Accounting And Financial Management (4th Edition)
What did the works of Follett and Mayo contribute to management thought?
Principles of Management
Fixed manufacturing overhead variance analysis (continuation of 8-23). The Sourdough Bread Company also allocat...
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
E6-14 Using accounting vocabulary
Learning Objective 1, 2
Match the accounting terms with the corresponding d...
Horngren's Accounting (11th Edition)
Discussion Questions 1. What characteristics of the product or manufacturing process would lead a company to us...
Managerial Accounting (4th Edition)
Prepare a production cost report and journal entries (Learning Objectives 4 5) Vintage Accessories manufacture...
Managerial Accounting (5th Edition)
Knowledge Booster
Similar questions
- Consider three different closed economies with the following national income statistics. Country A has taxes of $40 billion, transfers of $20 billion, and government expenditures on goods and services of $30 billion. Country B has private savings of $60 billion, and investment expenditures of $50 billion. Country C has GDP of $300 billion, investment of $70 billion, consumption of $180 billion, taxes of $60 billion, and transfers of $20 billion. Based on this information, which country has a $10 billion deficit? Country A Country B Country C All the three countries.arrow_forwardGenerally, how does the standard of living in the United States today compare to the standard of living in other countries? To the standard of living in the United States a century ago?The Bureau of Economic Analysis, or BEA, is a government agency collecting various U.S. economy statistics. From the BEA’s website, find data for the most recent year available on U.S. exports and imports of goods and services. Is the United States running a trade surplus or deficit? Calculate the ratio of the surplus or deficit to U.S. exports.There are many people out there providing opinions on the economy. How can differences of opinion about economic policy recommendations be resolved?arrow_forwardIf a country has a trade deficit of $30 billion, which of the following can be true? Group of answer choices The country's exports are $150 billion and its imports are $120 billion. The country's exports are $110 billion and its imports are $140 billion. The country's exports are $140 billion and its imports are $40 billion. The country's exports are $120 billion and its imports are $140 billion.arrow_forward
- Future U.S. deficits could be decreased by Question 36 options: decreasing current and future taxes increasing government expenditures and decreasing taxes decreasing government expenditures and increasing taxes increasing transfer payments and decreasing interest payments on the debtarrow_forwardAssume 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.arrow_forwardHow could an increase in a nation's fiscal deficit increase its trade deficit?arrow_forward
- In an economy open to trade, must a government budget deficit always be accompanied by an external sector deficit? Why or why not? Could a government budget deficit lead to a government budget surplus?arrow_forwardImprovements in productivity leads to economic growth thanks to … Public and private investment in human capital, technology and physical capital. The elimination of trade deficits and government budget deficits. Public investment in human capital, technology and physical capital exclusively. Higher government budget deficits and government spending in infrastructure and physical capital only.arrow_forwardUnder which of the following circumstances would it most likely be beneficial for a government to be a large borrower of foreign capital ? A. Never, as there is no economic benefit to a country from running Trade Deficits. B. If the inflow of Capital is absorbed/offset by greater government borrowing. C. When borrowing larger amounts is based on unconventional/heterodox economic viewpoints. D. When those funds are invested in sectors that sustain Economic Growth over time. E. None of the Abovearrow_forward
- The macroeconomic view of a trade deficit implies that, other things equal, the imposition of a tariff will reduce South Africa's trade deficit.arrow_forwardThe macroeconomic view of a trade deficit implies that, other things equal, the imposition of a tariff will reduce South Africa's trade deficit A. Because exports will be promoted and imports cannot possibly change B.Because imports will be reduced and exports cannot possibly change C.Only if the tariff has no impact on South Africa's spending or income D.Only if the tariff leads to increased income in South Africa relative to its spendingarrow_forwardExplain how economic populist policies usually lead to overvalued exchange rates and large trade deficits.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax