Question

What impact would federal spending cuts have on the current equilibrium level of economic activity? Would you favor such cuts? Why or why not?

Answer 1

A federal cut in the spendings would lead to shift of resources from a lesser valued activities of government to a higher valued acitivities conducted by private individuals , thus changing the equilibrium level of economic growth.

Yes, such cuts should be favoured as they in one way or another lead to shift from destructive acitivites by government to much more managed and productive activities by privates. Thereby, leading to a rise in the income or GDP of the country