Chapter 31: Problem 13
What are some fiscal policies for improving a society's human capital?
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Chapter 31: Problem 13
What are some fiscal policies for improving a society's human capital?
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How would you expect larger budget deficits to affect private sector investment in physical capital? Why?
Explain how decreased domestic investments that occur due to a budget deficit will affect future economic growth.
In the late 1990 s, the U.S. government moved from a budget deficit to a budget surplus and the trade deficit in the U.S. economy grew substantially. Using the national saving and investment identity, what can you say about the direction in which saving and/or investment must have changed in this economy?
Assume there is no discretionary increase in government spending. Explain how an improving economy will affect the budget balance and, in turn, investment and the trade balance.
The U.S. government has shut down a number of times in recent history. Explain how a government shutdown will affect the variables in the national investment and savings identity. Could the shutdown affect the government budget deficit?
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