🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Economics
1
answer
0
watching
111
views

The federal budget passed by Congress and signed by the president shows the relationship between budgeted expenditures and projected revenues. Why does the budget require a forecast of the economy? Under what circumstances would actual government spending and tax revenue fail to match the budget as approved?

Watch
1
answer
0
watching
111
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Yusra Anees
Yusra AneesLv10
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

WILL PICK BEST ANSWER

1. The federal government calculates the budget on a fiscal year that begins each year on October 1 and ends the following September 30. At the beginning of the 2005 fiscal year, the Congressional Budget Office [CBO] forecast that the federal budget deficit would be $368 billion. The actual budget deficit for fiscal 2005 was only $319 billion. Federal expenditures were $37 billion less than the CBO had forecast, and federal revenue was $12 billion more than the CBO had forecast.

a. Is it likely that the economy grew faster or more slowly during fiscal 2005 than the CBO has expected? Explain your reasoning.

b. Suppose that Congress and the president were committed to balancing the budget each year. Does what happened during 2005 provide any insights into difficulties they might run into in trying to balance the budget every year?

Congress is considering a major tax reform that will impact the revenue side of the budget. Last year President Obama insisted on new tax revenues from the wealthy arguing that old and poor people should not pay the entire burden of the deficit reduction through cuts on social programs, e.g., Medicare, Food Stamps as proposed by republicans. Congress recently passed a Budget Resolution discussing the policy changes they want in the national budget for next year. These proposals call for substantial cutbacks in social programs such as Food Stamps, Housing Support, Medicare, and reducing Medicare and abolishing Obamacare. Explain why you agree or disagree with Congress's best way to work toward a balanced budget. Many conservatives in Congress demand the President agree to their budget cuts and policy changes with the threat of shutting down the US government if he refuses to go along. Remember, the Constitution gives Congress the 'Power of the Pursue' that is to approve all taxes and expenditures.

Each year since winning control of the House of Representatives in the 2010 election, Tea Party Republicans have argued that we need to immediately initiate sharp reductions in government spending and entitlement programs and rapidly move towards a balanced budget, (although they have never actually produced a budget proposal in which tax revenues would match government spending plus entitlement transfers). Many Democrats, while arguing that tax rate increases on high-income earners need to be part of any deficit-reduction program, have agreed that we need to initiate budget deficit reduction now.

A) What is the argument against attempting to balance the Federal Government budget rapidly at present via either deep cuts in Federal Government spending or sharp increases in federal income tax rates?
B) Does this argument imply that budget deficits don't matter in the long run? If not, why might the impact of large deficits predicted in the long run under current tax and spending programs be different than the impact today? Explain.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in