1. A. Define what is meant by a i) balanced budget ii) budget surplus iii) budge

Question

1. A. Define what is meant by a i) balanced budget ii) budget surplus iii) budget deficit B. i) what condition of the federal budget (as stated in a above) contributes to an increase in aggregate demand and increases equilibrium GDP? ii) describe two fiscal policy actions which can produce an expansionary fiscal policy C. i) What condition of the federal budget (as stated in a above) contributes to a decrease in aggregate demand and a decrease in equilibrium GDP? ii) Describe two fiscal policy actions which can produce a contractionary fiscal policy

Explanation / Answer

i. balanced budget (particularly that of a government) refers to a budget in which revenues are equal to expenditures. Thus, neither a budget deficit nor a budgetsurplus exists ("the accounts balance").

ii. A budget surplus is a situation in which income exceeds expenditures. The term "budget surplus" is most commonly used to refer to the financial situations of governments when there income exceeds their expenditures.

iii. A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer to the financial situations of governments when their expenditures or spending exceeds the income.

B

i Budget Surplus

ii Increase in the Government Spending

Decrease in the Taxes

C,

i. Budget Deficit

ii. Decrease in the Government Spending

Increase in the Taxes

If you don't understand anything then comment. I'ill revert back on the same. :)

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.