Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 24, Problem 28APA
To determine
Identify the effect of the budget deficit on investment, real interest rate, and
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If net taxes fall by $80 billion, we would expect the government deficit to fall by $80 billion. household savings to rise by $80 billion. household savings to rise by less than $80 billion. household savings to fall by more than $80 billion.
8. Agreement and disagreement among economists Suppose that Larry, an economist from a college in Pennsylvania, and Megan, another economist from an investigative reporting group, are both guests on a popular science podcast. The host of the podcast is facilitating their debate over budget deficits. The following dialogue represents a portion of the transcript of their discussion: Megan: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Larry: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.. Megan: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. The disagreement between these economists is most likely due to differences between perception versus reality Despite their differences, with which proposition are two economists chosen at random most…
Collaboration with Congress during the Clinton administration allowed for an aggressive deficit‑cutting plan to pass. At the end of the 1990s, Congress eliminated the government deficit. Manipulate the graph to illustrate how the elimination of the deficit affects the loanable funds market.
look at image for graph
What does the model predict will happen to the quantity of private investment as a result of elimination of the government deficit? Private investment will
increase because the cost of borrowing increases.
decrease because the cost of borrowing increases.
decrease because the cost of borrowing decreases.
increase because the cost of borrowing decreases.
Chapter 24 Solutions
Macroeconomics
Ch. 24.1 - Prob. 1RQCh. 24.1 - Prob. 2RQCh. 24.1 - Prob. 3RQCh. 24.1 - Prob. 4RQCh. 24.2 - Prob. 1RQCh. 24.2 - Prob. 2RQCh. 24.2 - Prob. 3RQCh. 24.2 - Prob. 4RQCh. 24.2 - Prob. 5RQCh. 24.3 - Prob. 1RQ
Ch. 24.3 - Prob. 2RQCh. 24.3 - Prob. 3RQCh. 24.3 - Prob. 4RQCh. 24.3 - Prob. 5RQCh. 24.3 - Prob. 6RQCh. 24.4 - Prob. 1RQCh. 24.4 - Prob. 2RQCh. 24.4 - Prob. 3RQCh. 24 - Prob. 1SPACh. 24 - Prob. 2SPACh. 24 - Prob. 3SPACh. 24 - Prob. 4SPACh. 24 - Prob. 5SPACh. 24 - Prob. 6SPACh. 24 - Prob. 7SPACh. 24 - Prob. 8SPACh. 24 - Prob. 9SPACh. 24 - Prob. 10SPACh. 24 - Prob. 11SPACh. 24 - Prob. 12SPACh. 24 - Prob. 13APACh. 24 - Prob. 14APACh. 24 - Prob. 15APACh. 24 - Prob. 16APACh. 24 - Prob. 17APACh. 24 - Prob. 18APACh. 24 - Prob. 19APACh. 24 - Prob. 20APACh. 24 - Prob. 21APACh. 24 - Prob. 22APACh. 24 - Prob. 23APACh. 24 - Prob. 24APACh. 24 - Prob. 25APACh. 24 - Prob. 26APACh. 24 - Prob. 27APACh. 24 - Prob. 28APACh. 24 - Prob. 29APACh. 24 - Prob. 30APA
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- onsider the following data (in billion $) for a country in a particular year: (assume this country has Zero Transfer Payment Personal consumption expenditure (C) 200 Exports (x) 10 Government Purchases of goods and services (G) 120 Imports (m) 15 Gross Domestic Product (Y) 1800 Taxes 20 d. What is the value of gross investment? e. What is the value of net export? f. Is the country lending to or borrowing from rest of the world? g. Dose the government has deficit, balance or surplus budget? h. What is the amount of investment financed by national saving? i. What is the amount of investment financed by borrowing from rest of the world? J. What is the meaning of transfer paymentarrow_forward8. Agreement and disagreement among economists Suppose that Edison, an economist from a research institute in Texas, and Hilary, an economist from a nonprofit organization on the West Coast, are arguing over budget deficits. The following dialogue shows an excerpt from their debate: Hilary: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Edison: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits. Hilary: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. The disagreement between these economists is most likely due to a.differences in scientific judgments . b.differences between perception versus reality . c.differences in values Despite their differences, with which proposition are two economists chosen at random most…arrow_forward8. Agreement and disagreement among economists Suppose that Edison, an economist from a research institute in Texas, and Hilary, an economist from a nonprofit organization on the West Coast, are arguing over budget deficits. The following dialogue shows an excerpt from their debate: ___________________________________________________________________________ Hilary: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Edison: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits. Hilary: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. _______________________________________________________________________________ 1/The disagreement between these economists is most likely due to............................ a.differences in scientific…arrow_forward
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