Questions:
1. What problems are associated with the U.S. federal budget process? What solutions have been offered to these problems?
2. How do automatic stabilizers differ from discretionary fiscal policy tools?
3. In what ways can fiscal policy affect aggregate supply?
4. It is often said that we are passing our national debt on to our children and grandchildren. Is this true? Explain.
5. Distinguish between crowding out and crowding in.
6. What factors caused the federal budget to turn from a surplus to an expected deficit in 2002? What do you think will happen to the budget position over the next five years?