Exam 23: Six Debates Over Macroeconomic Policy: Part A

Why might reforms to encourage saving lead to a less egalitarian society?

Advocates of cutting taxes rather than increasing government expenditures in response to a recession argue that the increase in spending by consumers and business may be more effective than that of the government.Explain this argument.

Why might tax cuts be more appropriate than increasing government expenditures to counter recessions? Is there any evidence for this thinking?

List two of the three types of fiscal programs that the President and Congress emphasized in response to the 2008-2009 recession.

Proponents of requiring the government to balance its budget argue that debt burdens future generations.Explain one claim they make to support this argument.

What component of GDP is particularly volatile over the business cycle and can be targeted by tax cuts?

Are there any situations in which running a budget deficit is justified? Explain.

Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of economic fluctuations.What are some things policymakers can do when higher inflation becomes a concern?