Budget Deficit Essay

Complete all questions listed below. Clearly pronounce your answers 1. What impact would a change that shifts an economys issue possibilities tailor outward have on the long run aggregate ply curve? It will cause it to shift right. How have improvements in electronic computer technology affected production possibilities and the long run aggregate leave curve? They have cut the cost of doing business and expanded our production capacity. These types of improvements enhance productivity and shift the LRAS and SRAS curves to the right.2. Construct the AD, SRAS, and LRAS curves for an economy experiencing (a) full employment, (b) an stinting boom, and (c) a recession. (Graphs can be hand drawn or make by computer label all curves and axes clearly.)3. What is a budget famine? A situation in which get government spending exceeds total government revenue during a specific time period, usually unitary year. How are budget deficits financed? Selling of bonds, borrowing from abroad, raising taxes, and selling of assets. why do Keynesians believe that budget deficits will increase aggregate need? Because they believe that both fiscal and monetary policies affect aggregate demand.4. When fruit and employment slowed in early 2008, the Bush Administration and the Democratic intercourse passed a legislation sending households a check for $600 for each vainglorious (and $300 per child). These checks were financed by borrowing. Would a Keynesian favor this action? Yes, because Keynesian are in favor of government influence on the economy.