« previous next »

Author Question: Critically evaluate the statement, Budget deficits can only be bad for a country. What will be an ... (Read 46 times)

BRWH

  • Hero Member
  • *****
  • Posts: 553
on: Jun 30, 2018
Critically evaluate the statement, Budget deficits can only be bad for a country.
 
  What will be an ideal response?

Question 2

If macaroni and cheese is an inferior good, then a decrease in income results in
 
  A) an increase in the demand for macaroni and cheese.
  B) a decrease in the demand for macaroni and cheese.
  C) an increase in the supply of macaroni and cheese.
  D) a decrease in the supply of macaroni and cheese.
  E) Both answers A and D are correct.


ktidd

  • Sr. Member
  • ****
  • Posts: 319
Reply #1 on: Jun 30, 2018
Answer to Question 1

The statement is not correct. One time when running a budget deficit can be good for a country involves the case of automatic stabilizers. When the economy goes into recession, tax revenue falls and social insurance payments go up, softening the recession but also increasing the deficit. Those who believe in Ricardian Equivalence might also argue that budget deficits do not matter.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Always store hazardous household chemicals in their original containers out of reach of children. These include bleach, paint, strippers and products containing turpentine, garden chemicals, oven cleaners, fondue fuels, nail polish, and nail polish remover.

Did you know?

Drugs are in development that may cure asthma and hay fever once and for all. They target leukotrienes, which are known to cause tightening of the air passages in the lungs and increase mucus productions in nasal passages.

Did you know?

There are major differences in the metabolism of morphine and the illegal drug heroin. Morphine mostly produces its CNS effects through m-receptors, and at k- and d-receptors. Heroin has a slight affinity for opiate receptors. Most of its actions are due to metabolism to active metabolites (6-acetylmorphine, morphine, and morphine-6-glucuronide).

Did you know?

It is important to read food labels and choose foods with low cholesterol and saturated trans fat. You should limit saturated fat to no higher than 6% of daily calories.

Did you know?

You should not take more than 1,000 mg of vitamin E per day. Doses above this amount increase the risk of bleeding problems that can lead to a stroke.

The correct statement about hormones-insulin and glucagon The correct statement about hormones-insulin and glucagon
How to evaluate limits using algebra and the limit laws How to evaluate limits using algebra and the limit laws
How to evaluate limits using algebra and the limit laws (Part 2) How to evaluate limits using algebra and the limit laws (Part 2)
Sample budget spreadsheet form for first year of business. Sample budget spreadsheet form for first year of business.
How to evaluate the third-order determinant How to evaluate the third-order determinant
Flexible exchange rates are supposed to prevent long-term trade deficits. Flexible exchange rates are supposed to prevent long-term trade deficits.
Video: Brief Summary on Photosynthesis - Animation

For a complete list of videos, visit our video library