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 19CTQ
Explain how a shift from a government budget deficit to a budget surplus might affect the exchange rate.
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A government decides to introduce an expenditure-switching measure to reduce a balance of trade deficit. Which of the following is an expenditure-switching measure? Pick a,b,c, or d
A. A government subsidy to domestic producers
B. An increase in income tax
C. An increase in the rate of interest
D.A decrease in state benefits
Why is a nation with a current account deficit a borrower at that point in time?
What is a foreign trade deficit or surplus? How does this affectinterest rates?
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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Similar questions
- What is the difference between trade deficits and balance of trade?arrow_forwardWhen is a trade deficit likely to work out well for an economy? When is it likely to work out poorly?arrow_forwardImagine that the economy of Germany finds itself in the following situation: the government budget has a surplus of 1 of Germanys GDP; private savings is 20 of GDP; and physical investment is 18 of GDP. Based on the national saving and investment identity, what is the current account balance? If the government budget surplus falls to zero, how will this affect the current account balance?arrow_forward
- Does a trade surplus mean an overall inflow of financial capital to an economy, or an overall outflow of financial capital? What about a trade deficit?arrow_forwardIn recent decades, has the U.S. trade balance usually been in deficit, surplus, or balanced?arrow_forwardThe balance of payment is always balanced.How then do we talk about a surplus or a deficit in the balance of payment of a country?arrow_forward
- What is the effect of a fiscal expansion on output and interest rates when exchange rates are fixed and capital is perfectly mobile?arrow_forwardHow could an increase in a nation's fiscal deficit increase its trade deficit?arrow_forwardwhen it comes to the application of how the federal budget deficit affects economic variables, what is the impact of a federal budget deficit on interest rates and the trade balance?arrow_forward
- The United States typically has a balance-of-trade deficit in its trade with which two countries? North Korea Japan China Iranarrow_forwardVery short answer question What is meant by deficit in balance of payments?arrow_forwardPlease refer to this question as you answer the one attached since they are linked. a)What is equilibrium income in hypothetica,what is the government deficit? What is the current account balance?arrow_forward
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