According to Keynesian economics, what impact would a balanced budget amendment to our constitution have on our national economy?
A balanced budget amendment would destabilize the economy. It would make the business cycle more pronounced exacerbating the problem of unemployment in particular. This is because as the economy contracts, the deficit will rise due to the presence of the automatic stabilizers. Attempts to reduce the deficit, by raising taxes and/or curbing government spending, will reduce total spending (aggregate demand) further, worsening the recession.
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Assume that Jamaica and Norway can switch between producing coolers and producing radios at a constant rate. The following table shows the number of coolers or number of radios each country can produce in one day. Output Produced in One Day Coolers Radios Jamaica 12 6 Norway 24 3 Refer to Table 3-21. Jamaica’s opportunity cost of one cooler is
Entry and exit continue in monopolistic competition until the remaining firms are
A) earning an economic profit. B) incurring an economic loss. C) earning less than a normal profit. D) earning zero economic profit. E) producing the normal amount of product differentiation.
The Federal Reserve Board of Governors consists of:
a. 50 members selected by state legislatures. b. 12 members, one from each Federal Reserve District. c. 12 members nominated by the President and confirmed by the Senate. d. seven members elected by Congress. e. seven members nominated by the President and confirmed by the Senate.
Which group would be most likely to benefit from a binding price floor imposed on wheat?
a. buyers of wheat that are seeking lower prices b. sellers of wheat that are seeking higher prices c. sellers of goods considered complements to wheat, hoping to sell larger quantities of their products d. consumer groups hoping to keep overall food prices low