Government cuts its purchases

Related BrainMass Solutions

• Problem sets/policy questions

  Assume the government cuts its purchases by $150 billion.

• GDP and Net exports

  Assume the government cuts its purchases by $120 billion.

• Macroeconomics: Debt, Policy, Cuts

  (evolution of fiscal policy) 2) Increased government purchases with taxes held constant can eliminate a recessionary gap. How could tax cuts achieve the same result? 3) Why does the budget require a forecast of the economy?

• Aggregate Expenditures, Aggregate Supply and Aggregate Demand Questions

  Suppose, ceteris paribus, government purchases decreased by $4 billion, investment spending increased by $40 billion. A. EXPLAIN (no calculation yet). Would total output increase or decrease?

• Economics fiscal policy: current recession issues

  Further, the government can export the goods these factories produce and improve the foreign exchange situation of the country. I feel that the government should direct its tax cuts to businesses.

• the interest rate parity

  257200 Governement spending, Consumption and Currency Assume the government cuts its purchases by $120 billion.

• Making temporary tax cuts permanent

  Also, tax revenue is one of the ways government finances its debt. Increases budget deficit with low taxes means that government will have to issue more bonds in order to fund its deficit.

• Ronald Reagan's Economic Policies

  Reagan argued that supply-side economics and tax cuts would actually increase government revenue. On the flip side however, during his eight years in office, Reagan accumulated a $2 trillion debt?

• What possible macroeconomic arguments might George Bush use to defend his tax cuts at this time?

  A) Tax cuts spur consumption, which fuels economic growth. B) Tax cuts without lowered government spending creates huge budget deficits, which must be financed with more government bonds at higher interest rates.