Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 31, Problem 16CTQ
Assume there is no discretionary increase in government spending. Explain how an improving economy will affect the budget balance and, in turn, investment and the trade balance.
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Assume there is no discretionary increase in government spending. Explain how an improving economy will affect the budget balance and, in turn, investment and the trade balance.
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Chapter 31 Solutions
Principles of Economics 2e
Ch. 31 - In a country, private savings equals 600, the...Ch. 31 - Assume an economy has a budget surplus of 1,000,...Ch. 31 - In the late 1990s, the U.S. government moved from...Ch. 31 - Imagine an economy in which Ricardian equivalence...Ch. 31 - Why have many education experts recently placed an...Ch. 31 - What are some steps the government can take to...Ch. 31 - Based on the national saving and investment...Ch. 31 - How would you expect larger budget deficits to...Ch. 31 - Under what conditions will a larger budget deficit...Ch. 31 - What is the theory of Ricardian equivalence?
Ch. 31 - What does the concept of rationality have to do...Ch. 31 - What are some of the ways fiscal policy might...Ch. 31 - What are some fiscal policies for improving a...Ch. 31 - What are some fiscal policies for improving the...Ch. 31 - Explain how cuts in funding for programs such as...Ch. 31 - Assume there is no discretionary increase in...Ch. 31 - Explain how decreased domestic investments that...Ch. 31 - The U.S. government has shut down a number of...Ch. 31 - Explain how a shift from a government budget...Ch. 31 - Describe how a plan for reducing the government...Ch. 31 - Explain whether or not you agree with the premise...Ch. 31 - Explain why the government might prefer to provide...Ch. 31 - Under what condition would crowding out not...Ch. 31 - What must take place for the government to run...Ch. 31 - Sketch a diagram of how a budget deficit causes a...Ch. 31 - Sketch a diagram of how sustained budget deficits...Ch. 31 - Assume that the newly independent government of...Ch. 31 - Illustrate the concept of Ricardian equivalence...Ch. 31 - During the most recent recession, some economists...
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- a) 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_forwardIf taxes are increased, will most people save more or less than before? Does national saving rise or fall? Explain.arrow_forwardIf taxes are reduced , will most people save more or less than before ? Does national saving rise or fall? Explain .arrow_forward
- What is The Effect of a Government Budget Deficit on Investment?arrow_forwardCan governments use expansionary fiscal policy or expansionary monetary to effectively fight recessions? Why or Why Not?arrow_forwardHow much more output does the $20 trillion U.S economy produce when GDP increases by 1.0 percent?arrow_forward
- Explanation it correctlyarrow_forwardPlease, explain transitions from ‘surplus’ and ‘deficit’ to an equilibrium.arrow_forwardGovernment is considering a policy change to stimulate the economy by encouraging private consumption by reducing sales taxes. The loss of tax revenue will be made up by increasing taxes on corporate profits and excess savings. What are the short- and long-term effects of such a change?arrow_forward
- If you were given the chance to make your own 2021 National Budget Plan, which of the executive departments of the Philippines would get the lion's share of the budget? (Note: Please choose the Department of Health since we are in the middle of the pandemic.) GUIDE QUESTIONS Why did you choose that particular department to receive the lion's share of the budget? Explain briefly. What are the projects and programs that should be implemented? Are these revenue expenditures or capital expenditures? Explain. How would be these projects implemented? Are these for the long-term and on a by-phase basis? Where would be the location of the projects? Rural areas and/or urban areas? How long do you see the department getting the lion's share? Justify the forecast. References:https://dbm.gov.ph/images/pdffiles/201229-2021-Budget-at-a-Glance.pdfhttps://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2009/I2.pdfThank you!arrow_forwardHow do you recommend the government change GDP and taxes to stabilize the economy in each of the following scenarios? Economic growth has started slowing and the unemployment rate has increased over the past four months. There has been strong growth in GDP over the past year, unemployment is very low, and inflation has started to rise. Prices are stable, unemployment is low and the economy is growing at an average rate.arrow_forwardThe establishment of a new government affect the economy in various ways. Explain how the economy gets affected by it.arrow_forward
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