Questions from General Economics

Q: What are government’s fiscal policy options for ending severe demand-pull

What are government’s fiscal policy options for ending severe demand-pull inflation? Which of these fiscal options do you think might be favored by a person who wants to preserve the size of governmen...

Q: (For students who were assigned Chapter 29) Use the aggregate

(For students who were assigned Chapter 29) Use the aggregate expenditures model to show how government fiscal policy could eliminate either a recessionary expenditure gap or an inflationary expenditu...

Q: In year one, Adam earns $1,000 and saves

In year one, Adam earns $1,000 and saves $100. In year 2, Adam gets a $500 raise so that he earns a total of $1,500. Out of that $1,500, he saves $200. What is Adam’s MPC out of his $500 raise? a. 0....

Q: Some politicians have suggested that the United States enact a constitutional amendment

Some politicians have suggested that the United States enact a constitutional amendment requiring that the Federal government balance its budget annually. Explain why such an amendment, if strictly en...

Q: Explain how built-in (or automatic) stabilizers work.

Explain how built-in (or automatic) stabilizers work. What are the differences between proportional, progressive, and regressive tax systems as they relate to an economy’s built-in stability?

Q: Define the cyclically-adjusted budget, explain its significance, and

Define the cyclically-adjusted budget, explain its significance, and state why it may differ from the actual budget. Suppose the full-employment, noninflationary level of real output is GDP3 (not GDP2...

Q: Briefly state and evaluate the problem of time lags in enacting and

Briefly state and evaluate the problem of time lags in enacting and applying fiscal policy. Explain the idea of a political business cycle. How might expectations of a near-term policy reversal weaken...

Q: How do economists distinguish between the absolute and relative sizes of the

How do economists distinguish between the absolute and relative sizes of the public debt? Why is the distinction important? Distinguish between refinancing the debt and retiring the debt. How does an...

Q: True or false? If false, explain why. a

True or false? If false, explain why. a. The total public debt is more relevant to an economy than the public debt as a percentage of GDP. b. An internally held public debt is like a debt of the left...

Q: Why might economists be quite concerned if the annual interest payments on

Why might economists be quite concerned if the annual interest payments on the U.S. public debt sharply increased as a percentage of GDP?