Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 31, Problem 3SCQ
In the late 1990s, the U.S. government moved from a budget deficit to a budget surplus and the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Why would removing a trade restriction, such as a tariff, lead to more rapid economic growth?
Explain how higher savings leads to a higher standard of living.
What might deter a policymaker from trying to raise the rate of saving?
What is a budget deficit? How does it affect interest rates, investments and economic growth?
How does the financial system coordinate saving and investment?
What is the financial system, Name and describe two markets that are part of the financial system in the U.S. economy. Name and describe two financial intermediaries.
GDP in 2019 was $21 trillion. Consumption equals $12 trillion. Government spending was $5 trillion. The budget deficit was $600 billion.
Why do economists use real GDP rather than nominal GDP to gauge economic well-being? Define "Real" and "Nominal" GDP and explain the differences between them (Real and Nominal GDP).
Explain why an economy's income must equal its expenditure.
A country recently had $800 billion worth of domestic investment and its residents purchased $400 billion worth of foreign assets. If foreigners purchased $100 billion of this country’s assets, what was this country’s saving? Explain how you found your answer.
Briefly explain what a change in any part of the national saving and investment identity points out.
Chapter 31 Solutions
Principles of Economics 2e
Ch. 31 - In a country, private savings equals 600, the...Ch. 31 - Assume an economy has a budget surplus of 1,000,...Ch. 31 - In the late 1990s, the U.S. government moved from...Ch. 31 - Imagine an economy in which Ricardian equivalence...Ch. 31 - Why have many education experts recently placed an...Ch. 31 - What are some steps the government can take to...Ch. 31 - Based on the national saving and investment...Ch. 31 - How would you expect larger budget deficits to...Ch. 31 - Under what conditions will a larger budget deficit...Ch. 31 - What is the theory of Ricardian equivalence?
Ch. 31 - What does the concept of rationality have to do...Ch. 31 - What are some of the ways fiscal policy might...Ch. 31 - What are some fiscal policies for improving a...Ch. 31 - What are some fiscal policies for improving the...Ch. 31 - Explain how cuts in funding for programs such as...Ch. 31 - Assume there is no discretionary increase in...Ch. 31 - Explain how decreased domestic investments that...Ch. 31 - The U.S. government has shut down a number of...Ch. 31 - Explain how a shift from a government budget...Ch. 31 - Describe how a plan for reducing the government...Ch. 31 - Explain whether or not you agree with the premise...Ch. 31 - Explain why the government might prefer to provide...Ch. 31 - Under what condition would crowding out not...Ch. 31 - What must take place for the government to run...Ch. 31 - Sketch a diagram of how a budget deficit causes a...Ch. 31 - Sketch a diagram of how sustained budget deficits...Ch. 31 - Assume that the newly independent government of...Ch. 31 - Illustrate the concept of Ricardian equivalence...Ch. 31 - During the most recent recession, some economists...
Additional Business Textbook Solutions
Find more solutions based on key concepts
What are some of the problems with using the CPI?
Construction Accounting And Financial Management (4th Edition)
E5–26 Journalizing adjusting entries including estimate sales returns
Learning Objective 3, 4
Emerson St. Boo...
Horngren's Accounting (12th Edition)
Discussion Questions 1. What characteristics of the product or manufacturing process would lead a company to us...
Managerial Accounting (5th Edition)
Eagle Inc. uses a standard cost system. During the most recent period, the company manufactured 115,000 units. ...
Principles of Accounting Volume 2
On which financial statement would the Supplies account appear? A. Balance Sheet B. Income Statement C. Retaine...
Principles of Accounting Volume 1
Ravenna Candles recently purchased candleholders for resale in its shops. Which of the following costs would be...
Financial Accounting (12th Edition) (What's New in Accounting)
Knowledge Booster
Similar questions
- Explain why changes in government spending are viewed as nearly always affecting national saving, while changes in taxes are viewed as having more ambiguous effects on national saving and real interest rates. Why does it matter?arrow_forward“The result of the war that happened in Country A, it made Country A has negative public saving which is reduces national saving (the sum of public and private saving)”. Based on this information, explain (Show it with the graph) what happen in the market for loanable funds and the market for foreign currency exchangearrow_forwardEconomics Consider the following data for country B, an open economy, for this year: Y = $14 trillion C = $6 trillion G = $2 trillion NX = $3 trillion T = $4 trillion TR = $0.5 trillion a) Find country B’s domestic investment. b) Find country B’s private saving. c) Find country B’s public saving. d) Find country A’s national saving. e) Find country B’s net foreign investmentarrow_forward
- If Investment=f(r*) a. Explain with pictures how it affects the balance of Supply/Saving and Investment Demand if it increases investment demand abroadarrow_forwardYou have the following annual figures for the New Zealand economy. Investment expenditure $42.5 billion Government savings -$1.7 billion Many politicians and commentators would like to see continued increases in investment and current account surpluses rather than deficits. If these events are to occur, what else must be happening in the economy? 1. The Government must raise the retirement age. 2. Government spending must fall 3. National savings (private and government) must rise 4. New Zealand must restrict foreign ownership of land and other assetsarrow_forwardMany governments take foreign loans. Are these loans beneficial for gross domestic product? Why, or why not?arrow_forward
- Generally, how does the standard of living in the United States today compare to the standard of living in other countries? To the standard of living in the United States a century ago?The Bureau of Economic Analysis, or BEA, is a government agency collecting various U.S. economy statistics. From the BEA’s website, find data for the most recent year available on U.S. exports and imports of goods and services. Is the United States running a trade surplus or deficit? Calculate the ratio of the surplus or deficit to U.S. exports.There are many people out there providing opinions on the economy. How can differences of opinion about economic policy recommendations be resolved?arrow_forwardWhat is the difference between a government deficit and a trade deficit ?arrow_forward“The result of the war that happened in Country A, itmade Country A has negative public saving which isreduces national saving (the sum of public and privatesaving)”. Based on this information, Country A experienced __________ and explain what happen in the market for loanable funds and the market for foreign currency exchange (Show it with the graph)!arrow_forward
- Please answer ALL parts of the question, thank you! The chart below gives information about the country of Knutland. Answer the following questions assuming that Knutland has a closed economy. (a) Calculate private savings. Show your work. (b) Calculate public savings. Show your work. (c) Calculate national savings. Show your work. (d) Calculate investment spending. Show your work. (e) Assume that Knutland opens their economy and the capital inflows are $6 trillion and the capital outflows are $1 trillion. Calculate the total savings available to borrowers. Show your work. (f) Did the real interest rate in Knutland most likely increase, decrease, or stay the same when Knutland opened its economy? Explain.arrow_forwardhow do you solve national savingarrow_forwardUnited States currently runs a significant trade deficit with the rest of the world. Research an academic journal article regarding some of our trade balances with specific countries and share what you find. For example, with whom do we run the largest deficits, with whom do we have surpluses, etc.? Do you think it is a problem if we run a trade deficit? Why or why not? In answering, keep in mind what impact a trade deficit has on other parts of our balance of payments.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning