all questions listed below. Clearly label your answers.
increases in government spending financed by borrowing help promote a strong
recovery from a severe recession. Why or why not?
Yes and no, because in the case of severe recession, there would
be severe shortage of funds. The population wouldn’t have enough money while
the government would be unable to provide enough subsidies to them.
In case of financial recession, there is a shortage of funds in
the country. The people living in the country do not have enough money and
government is also not able to provide enough subsidies to them. One of the
ways to avoid the recessionary conditions and ensure better support to the
economy is borrowing money from abroad. Borrowing of funds from other countries
might solve the problem of the economy in the short run but, in the long run,
the fiscal deficit for the country will increase. This will again put the
economic condition of the country at stake. In this way, borrowing from abroad
is not a proper method of coming out of recession.
fiscal policy have a strong impact on aggregate demand? Did the shift of the
federal budget from deficit to surplus during the 1990s weaken aggregate
demand? Did the government spending increases and large budget deficits of 2008–2011
strengthen aggregate demand? Discuss.
is the current rate of unemployment? (See bls.gov and state the
month you are reporting.) How rapidly has GDP grown during the past 3 years? (See
bea.gov and state the annual growth rate for
each year.) What do these figures indicate about the validity of the Keynesian
changes in discretionary and fiscal policy likely to be instituted in a manner
that will reduce the ups and downs of the business cycle? Why or why not?