Exam 13: A: Fiscal Policy, Deficits, Surpluses, and Debt

Describe Canada's Economic Action Plan to combat the Great Recession of 20089 - 2009.

If we as individuals continue to spend more than we made, we would sooner or later have to pay up or go bankrupt.Our government is in the same position or will be unless we get serious about our liabilities and reduce expenditures enough to reduce the deficits or increase revenues enough to pay our bills and have some left over to pay the old bills.Evaluate this statement.

Differentiate between the federal deficit and the federal debt.

How can the effect of an expansionary fiscal policy be weakened?

Is the public debt a burden on future generations? Explain.

Describe the European Sovereign Debt Crisis.

Differentiate between discretionary fiscal policy and non-discretionary policy (or built-in stabilization).

"The more progressive a tax system, the greater is the economy's built-in stability." Explain this statement for both recessionary and peak phases of the business cycle.

How does the public debt contribute to income inequality?

Comment on the statement: "Discretionary fiscal policy offers an ideal approach to dealing with the nation's economic problems."

Under a particular tax system, the government collects $80 billion in tax revenues when GDP is $800 billion and $88 billion when GDP is $900 billion.Is this tax system regressive, proportional, or progressive?

Describe the impact of the European Sovereign Debt Crisis on interest rates for government bonds in Europe

How can the government finance its expenditures?