Chapter 30: Problem 37
Why are expenditures such as crime prevention and education typically done at the state and local level rather than at the federal level?
Chapter 30: Problem 37
Why are expenditures such as crime prevention and education typically done at the state and local level rather than at the federal level?
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Get started for freeIs it possible for a nation to run budget deficits and still have its debt/GDP ratio fall? Explain your answer. Is it possible for a nation to run budget surpluses and still have its debt/GDP ratio rise? Explain your answer.
Debt has a certain self-reinforcing quality to it. There is one category of government spending that automatically increases along with the federal debt. What is it?
What would happen if contractionary fiscal policy were implemented during an economic boom but, due to lag. it did not take effect until the economy slipped into recession?
What would happen if expansionary fiscal policy was implemented in a recession but, due to lag, did not actually take effect until after the economy was back to potential GDP?
Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and sketch a diagram using aggregate demand and aggregate supply curves to illustrate your answer: a. A recession. b. A stock market collapse that hurts consumer and business confidence. c. Extremely rapid growth of exports. d. Rising inflation. e. A rise in the natural rate of unemployment. f. A rise in oil prices.
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