Problems
would impede long-run economic growth? 24 . What must take place for the government to run deficits without any ?
Problems
25 . Sketch a diagram of how a causes a . (Hint: Begin with what will happen to the when foreigners more U.S. government debt.) 26 . Sketch a diagram of how sustained budget deficits cause low economic growth. 27 . Assume that the newly independent government of Tanzania employed you in 1964. Now free from British rule, the Tanzanian parliament has decided that it will spend 10 million shillings on schools, roads, and healthcare for the year. You estimate that the net taxes for the year are eight million shillings. The government will finance the difference by selling 10-year government bonds at 12% interest per year. Parliament must add the interest on outstanding bonds to government expenditure each year. Assume that Parliament places additional taxes to finance this increase in government expenditure so the gap between government spending is always two million. If the school, road, and healthcare budget are unchanged, compute the value of the accumulated debt in 10 years. 28 . Illustrate the concept of using the and supply of graph. 29 . During the most recent , some economists argued that the change in the interest rates that comes about due to deficit spending implied in the and supply of graph would not occur. A simple reason was that the government was stepping in to invest when private firms were not. Using a graph, explain how the use by government in investment offsets the deficit .
FIGURE 19.1Looking for WorkJob fairs and job centers are often available to help match people to jobs. This fair took place at a college in the U.S., a with policies to keep unemployment levels in check. Unemployment is an issue that has different causes in different countries, and is especially severe in the low- and middle- economies around the world. (Credit: modification of “College of DuPage Hosts Career Fair 2015 36” by COD Newsroom/Flickr, CC BY 2.0)
In this chapter, you will learn about:
- The Diversity of Countries and Economies across the World
- Improving Countries’ Standards of Living
- Causes of Unemployment around the World
- Causes of in Various Countries and Regions
- Balance of Trade Concerns
BRING IT HOME Youth Unemployment Chad Harding, a young man from Cape Town, South Africa, completed school having done well on his exams. He had high hopes for the future. Like many young South Africans, however, he had difficulty finding a job. “I was just stuck
Text from Principles of Macroeconomics 3e, OpenStax, licensed CC BY-NC-SA 4.0. Access for free at openstax.org.
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