Budget Deficit Essay

Complete al 1 questions listed below. Cl too soon label your answers 1. What impact would a change that breakouts an economys mathematical product possibilities curve outward concord on the long leech essence add curve? It will cause it to suspension right. How have improvements in computer engineering affected production possibilities and the long run aggregate supply curve? They have cut the cost of doing business and spread out our production capacity. These types of improvements enhance productivity and shift the LRAS and SRAS curves to the right.2. Construct the AD, SRAS, and LRAS curves for an economy experiencing (a) full employment, (b) an economic boom, and (c) a recession. (Graphs can be hap drawn or done by computer label all curves and axes clearly.)3. What is a budget deficit? A fact in which total government spending exceeds total government revenue during a specific time period, usually one year. How are budget deficits financed? Selling of bonds, adoptio n from abroad, raising taxes, and selling of assets. Why do Keynesians believe that budget deficits will enlarge aggregate demand? Because they believe that both fiscal and monetary policies affect aggregate demand.4. When output and employment slowed in early 2008, the Bush Administration and the Democratic relative passed a legislation sending households a check for $600 for each adult (and $ three hundred per child). These checks were financed by borrowing. Would a Keynesian party favour this action? Yes, because Keynesian are in favor of government influence on the economy.