--%>

Are government budget scarcities always bad

‘The country is at present in recession and this has led to worse tax revenue and high expenses. The effect is a huge deficit. The government decides to increase taxes and lower government expenses. Is this an excellent idea?’

E

Expert

Verified

Getting students to recognize and apply a suitable economic model and consider the significance of the multiplier in responding this question.

   Related Questions in Macroeconomics

  • Q : Components of aggregate demand What are

    What are the components of aggregate demand (AD)? Answer: The components of AD are as follows:AD = C + I + G + (X - M) By Simplifying AD = C + I, Here C refers to Household consumption demand and I refer

  • Q : Principles of macroeconomics Explain

    Explain the concept of “economies of scale” and “increasing returns”.

  • Q : Difference between APC and MPC

    Differentiate between APC and MPC. The value of which of them can be greater than another and when? Answer: APC is the average

  • Q : In which of these two statements

    "In corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand."

  • Q : Formula for Fiscal deficit Fiscal

    Fiscal deficit: Fiscal deficit is stated as the surplus of total expenditure over total receipts, apart from borrowings. Fiscal deficit = Total expenditure (Rev. Exp. + Cap. Exp.) – Total Receipts

  • Q : Limitations of using GDP as an index of

    What are the limitations of using GDP as an index of welfare of a country?A) The N.I. figures provide no indication of the population, skill and resource of the country. Thus the levels of welfare stay low.B) A higher N.I. migh

  • Q : Supply law and it's factors State the

    State the Law of supply and explain the factors that affecting supply of commodity

  • Q : Value of imports of goods The country’s

    The country’s balance of trade is Rs.500 crores. The value of exports of goods is Rs. 650 crores. What is the value of imports of goods?

  • Q : Interest receipt Why is interest

    Why is interest received classified as revenue receipt? Answer: Interest received is a revenue receipt since it does not build any liability nor it leads to the red

  • Q : Define Devaluation Devaluation means

    Devaluation means decrease in the external value of a country’s currency as an aware policy measure adopted by the Government of a country. In another words, we make our currency less costly in terms of foreign currency. This builds our goods ch