During the 1990s, the federal budget moved from a deficit to a surplus. What factors accounted for this change? Were the budget surpluses of the late 1990s good for the economy? Would it have been better to have reduced taxes and balanced the budget during 1999-2000? Why or why not?

During the 1990s, the federal budget moved from a deficit to a surplus. What factors accounted for this change? Were the budget surpluses of the late 1990s good for the economy? Would it have been better to have reduced taxes and balanced the budget during 1999-2000? Why or why not?

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter17: Stabilizing The National Economy

Section: Chapter Questions

Problem 23AA

See similar textbooks

Related questions

Q: What are the president's budget request responsibilities?

A: President's budget request: The budget process in the U.S begins when the President submits a budget…

Q: If the government is running a fiscal deficit, it can only finance it through monetization. true or…

A: To finance the deficit, the government borrows money from the central bank and repays it by selling…

Q: What are the implications of the current fiscal stimulus and low interest on the future of our…

A: A stimulus package is defined as a coordinated measure by the government to lift the economy out of…

Q: What is deficit, and why is the government willing to do this? What is expected to happen to the US…

A: At the point when a government's expenditures on goods, services, or transfer payments surpass their…

Q: Of the two methods of reducing the deficit to zero-raising taxes or decreasing government…

A: For reducing the deficit to zero, increasing the tax rate, or decreasing government spending can…

Q: Naked Economics: Undressing the Dismal Science Book by Charles Wheelan This question is based on…

A: Answer: Budget deficit: it the government spending is more than the government revenue then there…

Q: Why did the budget surpluses in 2000 and 2001 give way to a series of budget deficits beginning in…

A: In the 2000 and 2001 budget surplus was 2.5% and the cyclical adjusted budget surplus was 1% to the…

Q: Which of the following is a TRUE statement about arguments for and against requiring a balanced…

A: When talking about balanced budget, it is the situation when government is spending exactly the same…

Q: When the economy is in recession, government revenue falls due to a falling tax base. Therefore the…

A: Fiscal policy is the adjustment of spending and taxes by the government with a purpose to maintain…

Q: Identify and describe some practical difficulties of discretionary fiscal policy.

A: please find the answer below.

Q: What effect did the economic program have on the federal deficit?

A: ECONOMIC PROGRAM: Economic programs are the programs formed to improve the economy of the United…

Q: Given the incentive of elected political officials to spend and their reluctance to tax, two-thirds…

A: According to the statement, the elected political candidates reluctance is to spend on the tax.…

Q: when is the most appropriate time economically speaking for the federal budget be in a deficit?

A: A budget deficit is a situation when government spending exceeds the government's total income. A…

Q: Will a budget deficit be more expansionary if it is financed by borrowing from the Federal Reserve…

A: If the budget deficit is financed by borrowing from Federal Reserve, it will cause to increase the…

Q: The Federal Budget is divided into Mandatory and Discretionary spending. Decide which statement is…

A: The federal budget is divided into Two categories: Mandatory spending Discretionary Spending

Q: since 1994 has the federal budget had a surplus

A: Budget surplus means total revenue exceeds total expenditure by the government. From the graph…

Q: How will cuts in state budget spending affect federal expansionary policy?

A: Expansionary fiscal policy refers to an increase in the federal government purchases and or a…

Q: Which of the following is a TRUE statement about arguments for and against requiring a balanced…

A: The federal budget is the government's forecast for income and expenditures for each fiscal year.The…

Q: Describe how the federal deficit is a burden on the shoulders of future generations.

A: Answer: Introduction: Deficit or budget deficit refers to the excess of spending over revenue. In…

Q: What budget changes would have to occur in order to lower an annual deficit? Annual expenditures…

A: A government budget is a statement of its planned expenditures and revenue receipts for a given time…

Q: Which of the following statements about state budget is wrong? a. Budget may be annual or biennial…

A: In an economy, government budget plays a significant impact on the overall growth and development of…

Q: What are some of the arguments for and against a requirement that the federal government budget be…

Q: What would happen to the stated sizes of Federal budget deficits or surpluses if the current annual…

A: Social Security Trust basically has two funds, the survivor's insurance, and the old-age insurance.…

Q: If AD=$1,500, AS=$2,500, Consumer borrowing =$500, find the level of the budget deficit so that…

Q: How can a budget deficit be reduced? Group of answer choices Decreasing government spending…

A: Ans. A. Decreasing government spending and/or increasing taxes A budget deficit is a situation when…

Q: How is the Social Security system currently influencing the size of the budget deficit? If it is not…

A: The budget deficit creates the problem in the economy. When there is budget deficit, it will leads…

Q: Channels through which the federal budget is impacted in an economic recession in general. 2. The…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: If you voted for your committees to increase overall spending under your jurisdiction, resulting in…

A: National debt in year N = National debt in year (N - 1) + Budget deficit in year N (- Budget surplus…

Q: The budget function for the economy of Sunsville is T - G = -400 + 0.25Y. a) Suppose income is…

A: Given the budget function of Sunsville: T-G=-400+0.25Y ... (1) When the value of T-G is…

Q: (Chronic Deficits) Why has the federal budget been in deficit in all but 14 years since 1929?

A: When the expenditures are greater than what is earned, there exists a budget deficit in the economy.…

Q: Many countries have constitutional requirements that their budgets be in balance (or in surplus) in…

A: A balanced budget refers to when, during a given period, the government spends an amount equal to…

Q: How budget deficits and national debt are defined?

A: The budget deficits of government are a difference between the total spending of government and the…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Congress recently passed and President Biden signed the American Rescue Plan (ARP), which will add $1.9 trillion to the federal deficit over the next ten years. Even before this new spending, federal debt held by the public was slated to reach 107% of GDP by 2031, the highest in history. What do high deficits mean going forward?
Which of the following is a TRUE statement about arguments for and against requiring a balanced federal budget in the U.S.? One argument against a required balanced federal budget is that this mandate cannot be added to the Constitution, and therefore, could not be enforced. One argument against a required balanced federal budget is that the government does not have macroeconomic responsibilities One argument against a required balanced federal budget is that sometimes it is necessary or beneficial to run large budget deficits in the short-run. One argument in support of a required balanced federal budget maintains that having a balanced budget each year would make the impacts of economic recessions less severe.
When the economy is in recession, government revenue falls due to a falling tax base. Therefore the proper role of government should be to increase taxes and cut spending so as to balance the Federal budget. Do you agree? Why?
discuss the budget cycle.discuss why the annual budget is considered as a political act of state?
How and why would joint budget resolutions be effective at influencing budget reforms and reducing deficits?
Which of the following is a TRUE statement about arguments for and against requiring a balanced federal budget in the U.S.? Group of answer choices One argument against a required balanced federal budget is that sometimes it is necessary or beneficial to run large budget deficits in the short-run. One argument against a required balanced federal budget is that the government does not have macroeconomic responsibilities One argument in support of a required balanced federal budget maintains that having a balanced budget each year would make the impacts of economic recessions less severe. One argument against a required balanced federal budget is that this mandate cannot be added to the Constitution, and therefore, could not be enforced.
In recent economic history, the U.S. federal budget was in surplus from 2001 through 2005. 1998 through 2001. 1990 through 1997. 1980 through 1989.
In which of the following cases does the size of the government’s debt and deficit indicate potential problems for the economy? Explain your answer. a) The government’s debt is relatively low, but the government is running a large budget deficit as it builds a high-speed rail system to connect the major cities of the nation. b) The government’s debt is relatively high due to a recently ended deficit-financed war, but the government is now running only a small budget deficit. c) The government’s debt is relatively low, but the government is running a budget deficit to finance the interest payments on the debt. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
How will the deficit for the bottom line budget of $3.1 trillion affect the economy?
What would happen to the budget deficit if the:a) GDP growth rate jumped from 1 percent to 3 percent?b) inflation increased by 2 percentage points?
how could our government help solve the budget crisis? What changes could/should be made to spending and what changes could/should be made to taxes? How would these changes impact our economy? How would these changes impact people?
Suppose we wanted to use fiscal policy (a change in taxes OR a change in government spending) in order to stimulate the economy. If we were concerned about the impact on the government’s budget deficit, which policy option should we choose? Explain your reasoning.