Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Chapter 13: Fiscal Policy

Expert-verified
Macroeconomics
Pages: 468 - 502

14 Questions for Chapter 13: Fiscal Policy

  1. In each of the following cases, determine whether the policy is an expansionary or contractionary fiscal policy.

    Found on Page 479
  2. Explain why a $500 million increase in government purchases of goods and services will generate a larger rise in real GDP than a $500 million increase in government transfers.

    Found on Page 484
  3. Why is the cyclically adjusted budget balance a better measure of whether government policies are sustainable in the long run than the actual budget balance?

    Found on Page 490
  4. Explain how each of the following events would affect the public debt or implicit liabilities of the U.S. government, other things equal. Would the public debt or implicit liabilities be greater or smaller?

    Found on Page 498
  5. How did the political reaction to government funding for the Solana project differ from the reaction to more conventional government spending projects such as roads and schools? What does the case tell us about how to assess the value of a fiscal stimulus project?

    Found on Page 500
  6. Explain why federal disaster relief, which quickly disburses funds to victims of natural disasters such as hurricanes, floods, and large-scale crop failures, will stabilize the economy more effectively after a disaster than relief that must be legislated.

    Found on Page 479
  7. Suppose the economy is in a slump and the current public debt is quite large. Explain the trade-off of short-run versus long-run objectives that policy makers face when deciding whether or not to engage in deficit spending.

    Found on Page 498
  8. Explain why a $500 million reduction in government purchases of goods and services will generate a larger fall in real GDP than a $500 million reduction in government transfers.

    Found on Page 484
  9. In the chapter, we talked about the problem of lags in discretionary fiscal policy. What does the Solana case tell us about this issue?

    Found on Page 500
  10. Explain why states required by their constitutions to balance their budgets are likely to experience more severe economic fluctuations than states not held to that requirement.

    Found on Page 490

Related Economics Textbooks with Solutions

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.