Econ 214 Problem Set 3: Business Economics Question Paper
Problem Set 3
Complete all questions listed below. Clearly label your answers.
1. Will increases in government spending financed by borrowing help promote a strong recovery from a severe recession. Why or why not?
2. Does fiscal policy have a strong impact on aggregate demand? Did the shift of the federal budget from deficit to surplus during the 1990s weaken aggregate demand? Did the government spending increases and large budget deficits of 2008–2011 strengthen aggregate demand? Discuss.
3. What is the current rate of unemployment (See bls.gov and indicate the month you are reporting)? How rapidly has GDP grown during the past 3 quarters? (See bea.gov and state the quarterly growth rate for each of the last three quarters) Is the economic growth high enough to validate the Keynesian view? Explain.
4. Are changes in discretionary and fiscal policy likely to be instituted in a manner that will reduce the ups and downs of the business cycle? Why or why not?
This assignment is due by 11:59 p.m. (ET) on Monday of Module/Week 4.
Econ 214 Problem Set 3
Complete all questions listed below. Clearly label your answers.
1. Will increases in …show more content…
For example if the government increases the level of duties on cigarettes and tobacco then, there is likelihood that demand of the product will decrease due to increase in the prices thanks to rising duties and taxes (Labor Force Statistics from the Current Population Survey, n.d.). During the years of 1990s, there was a shift in the economy from deficit to surplus. When the economy moved into fiscal surplus then, it’s spending towards the country declined to a certain level. Due to the decline, the level of subsidies had reduced and demand of products also decreases. With the increase in government spending aggregate demand does increase but, it is not always the case when, there is fiscal deficit in the country. Answer No.
Complete all questions listed below. Clearly label your answers.
1. Will increases in government spending financed by borrowing help promote a strong recovery from a severe recession. Why or why not?
2. Does fiscal policy have a strong impact on aggregate demand? Did the shift of the federal budget from deficit to surplus during the 1990s weaken aggregate demand? Did the government spending increases and large budget deficits of 2008–2011 strengthen aggregate demand? Discuss.
3. What is the current rate of unemployment (See bls.gov and indicate the month you are reporting)? How rapidly has GDP grown during the past 3 quarters? (See bea.gov and state the quarterly growth rate for each of the last three quarters) Is the economic growth high enough to validate the Keynesian view? Explain.
4. Are changes in discretionary and fiscal policy likely to be instituted in a manner that will reduce the ups and downs of the business cycle? Why or why not?
This assignment is due by 11:59 p.m. (ET) on Monday of Module/Week 4.
Econ 214 Problem Set 3
Complete all questions listed below. Clearly label your answers.
1. Will increases in …show more content…
For example if the government increases the level of duties on cigarettes and tobacco then, there is likelihood that demand of the product will decrease due to increase in the prices thanks to rising duties and taxes (Labor Force Statistics from the Current Population Survey, n.d.). During the years of 1990s, there was a shift in the economy from deficit to surplus. When the economy moved into fiscal surplus then, it’s spending towards the country declined to a certain level. Due to the decline, the level of subsidies had reduced and demand of products also decreases. With the increase in government spending aggregate demand does increase but, it is not always the case when, there is fiscal deficit in the country. Answer No.