Question

Question Government deficits and debt. A-Are fiscal deficits and government debt a problem? Why/why not? B-What...

Question Government deficits and debt.

A-Are fiscal deficits and government debt a problem? Why/why not?

B-What advice would you give a heavily indebted government?

Homework Answers

Answer #1

A. Yes, fiscal deficit considered to be as a problem for any government because according to the definition of it, It is a deficit due to more importing and less exporting and this will cause the economy to suffer ion long run and results in many consequences like- decrease in domestic currency in foreign market, rise of prices, inflation in the market etc.

B. Following are some steps that can be taken by the government-

1. INCREASING THE TAX-Significantly Increasing the taxes on some item will actually benefit the government and helps in controlling the deficit

2.PRODUCTION-focus on more production in the domestic country so that the exports can be increased and with that employment opportunities will also be higher

3.REDUCE GOVERMENT SPENDING and limit it to where it is required actually like for giving subsidies to the poor peoples and promote sustainable development.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Whether or not deficits create a burden depends on how and why the government incurred...
1. Whether or not deficits create a burden depends on how and why the government incurred the deficits in the first place. Explain. 2. Explain why the portion of the national debt owed to foreigners is a serious matter, whereas the portion owed to U.S. citizens is of less concern. Why does the U.S. national debt pose less of a problem than the debts of Greece in 2010?
How budget deficits and national debt are defined? Is it a good policy for the government...
How budget deficits and national debt are defined? Is it a good policy for the government to create a budget deficit? Why and why not?
How budget deficits and national debt are defined? Is it a good policy for the government...
How budget deficits and national debt are defined? Is it a good policy for the government to create budget deficit? Why and why not?
1. Explain why we expect the government to run deficits during a recession even if there...
1. Explain why we expect the government to run deficits during a recession even if there is no new fiscal policy enacted. (Make sure you talk about both the spending reason and the tax reason for this!) 2. Summarize what you learned from the New York Times article about arguments around pandemic deficit spending. There are many economists quoted in the article. Choose one quote from the article you find most helpful and explain why. 3. Summarize what you learned...
Together with large current account deficits, the Argentine government began running increasingly large budget deficits. How...
Together with large current account deficits, the Argentine government began running increasingly large budget deficits. How might this be structurally related to the choice of a fixed exchange rate regime? deficits were needed to finance capital outflow at the established rate with no monetary policy, fiscal policy became the only macroeconomic policy tool to fight recessions fiscal profligacy had nothing to do with the exchange rate, Argentina's political leadership was as irresponsible as its monetary leadership had been the debt...
What is the best government fiscal policy and why?
What is the best government fiscal policy and why?
1. Explain who is in charge of fiscal policy and when fiscal stimulus will be needed...
1. Explain who is in charge of fiscal policy and when fiscal stimulus will be needed in an economy. 2. Explain why we expect the government to run deficits during a recession even if there is no new fiscal policy enacted. (Make sure you talk about both the spending reason and the tax reason for this!) 3. Summarize what you learned from the New York Times article about arguments around pandemic deficit spending. There are many economists quoted in the...
Here's the question: Is the ratio of government debt to GDP a useful indicator of a...
Here's the question: Is the ratio of government debt to GDP a useful indicator of a government’s indebtedness?When could it be misleading? I'm confused with the solution, especially the highlighted sentence: Debt is a stock and a government liability; GDP is a flow and a potential source of tax revenue. The economic variable that connects real stocks and real flows is the real interest rate. If the real interest rate is low then it is possible to service a much...
Give an example of a “debt ratio” for a typical local government. Explain why the debt...
Give an example of a “debt ratio” for a typical local government. Explain why the debt might be incurred and the implications if the debt ratio is high or low.
Question 2: Fiscal Policy Suppose the economy is in a recessionary gap, and the government reponds...
Question 2: Fiscal Policy Suppose the economy is in a recessionary gap, and the government reponds by conducting an expansionary fiscal policy. a. Suppose the marginal propensity to consume is 0.8. Calculate the effect of a $1,000 increase in government purchases on real GDP, and then calculate the effect of a $1,000 tax cut on real GDP. b. Why does a $1,000 tax cut generate a smaller multiplier effect than a $1,000 increase in government purchases?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT