Answer:
d. cut spending equal to the reduction in tax revenue
Explanation:
Recession is basically a period of temporary economic decline where people usually buy less and less trade happens. When this happens, the government loses TAX revenue (money coming in from taxes) so a good way for govt. to balance the budget (amount that govt needs for spending on different areas) is to cut spending equal to the reduction in tax revenue (the reduction came about due to recession)
In other words, reduce spending by x dollars (here x dollar represents the lost tax revenue.
The answer to this question is False.
Answer:
The correct answer is A) Debt increased by $1.6 trillion
Explanation:
To find whether the government has a surplus or a deficit, we use this simple formula:
Govt surplus/deficit = G-T
where G = government outlays, and T= government revenue or taxes.
- If G > T Government has a deficit
- if G = T Government has a balanced budget
- if G < T Government has a budget surplus
Now, we simply replace the terms
- Govt surplus/deficit = $3.8 billion - $2.2 trillion = $1.6 billion
Because in this equation G > T, the government is in deficit, the deficit equals $1.6 billion, and will have to be financed by issuing debt. Hence, debt will increase by the same amount.
Answer:
In the Basic Solow Model without exogenous growth, if the population, and therefore the labor supply, doubles <u>steady state output per worker will be unchanged.</u>
Explanation:
According to the given scenario options A, B and C are ruled out. Hence, the answer to the above question is option D. Steady state output per worker will be unchanged.
Hope this helps.
