QUESTION 3 During a recession, higher welfare spending e increases the size of t

Question

QUESTION 3 During a recession, higher welfare spending e increases the size of the budget deficit even if the government does not undertake discreionary fescal polcy e decreases the size of the budget defict regardless of the governements discretionary fiscal pokcy e decreases the size of the budget deficit only if the government undertakes disoretionary fescal policy e has the same effect on the budget deficit as it does during panods of expansion QUESTION 4 Who is responsible for faxoing and appropriation? From w TTT Arial QUESTION If the US government defauilts on its debt payment it could have a big impact on the warld economy likely impact? cost of borrowing for US would increase o market interest rates in the US would increase o unemployment would increase o the federal deficit would decine

Explanation / Answer

1) During a recession, higher welfare spending

Solution: increase the size of the budget deficit even if the government does not undertake discretionary fiscal policy

Explanation: During a recession, higher welfare spending reduce inequality and reduce relative poverty. It increases the size of the budget deficit inspite if the government does not undertake discretionary fiscal policy

2) Who is responsible for taxing and appropriation? From where does the authority to do this come? Explain thoroughly

The Internal Revenue Service (IRS) in United States is the is responsible for taxing and appropriation. Internal Revenue Service on a regular intervals makes an estimation of the total amount of money calculated to collect in taxes in a specific year, and difference among it and actual amount collected is called tax gap. Congress holds the power for an outlay and collect taxes, duties, imposts and excises

3) If the US government defaults on its debt payment it could have a big impact on the world economy. Which of the following would not be likely impact?

Solution: the federal deficit would decline

Explanation: The impact will be an increase in the cost of borrowing; mortgage interest rates; unemployment and market interest rates for US.

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