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Clement Clement
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4 years ago
Recall the Application about how to measure the long-run fiscal imbalances in the United States to answer the following question(s). Even though federal budget-deficit projections have increased in recent years, they still do not accurately portray the long-run fiscal problems facing the United States. As the population ages, life expectancies increase, and health-care costs continue to grow, expenditures on Social Security and Medicare are expected to increase significantly, too. Economists Jagadeesh Gokhale and Kent Smetters have developed a comprehensive measure of the nation's indebtedness that they call the "fiscal imbalance."


According to this Application, in 2005, the U.S. fiscal imbalance was approximately $63 trillion, or 5 times GDP. If the Fed decided to purchase newly issued government bonds as a way to reduce this imbalance, this would essentially

▸ reduce the money supply and reduce inflation.

▸ reduce the money supply and increase the money demand.

▸ create money but reduce inflation.

▸ create money and result in inflation.
Textbook 
Macroeconomics: Principles, Applications and Tools

Macroeconomics: Principles, Applications and Tools


Edition: 7th
Authors:
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urbacoreurbacore
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4 years ago
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Clement Author
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4 years ago
You make an excellent tutor!
jblazah
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Yesterday
Smart ... Thanks!
kamikazekota
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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