Unformatted text preview: s PART II ESSAY#1 1. Budget Deficit = Government Expenditures - Taxes 2. Keeping the budget deficit low will imply cutting on government expenditures and/or raising taxes. Both actions reduce agg r e 3. SEE SHEET ESSAY #2 1. GDP= C+I+G+(EX-IM) -Exports to China have increased-Investment has increased due to business cycles Inflationary monetary policies that favor borrowers (Japanese firms) has also freed up investment since firms have to pay bac k 2. SEE SHEET 21. No. Buying used goods do not help raise todayhs GDP, since GDP accounts only for goods produced this year using facto...
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This note was uploaded on 04/03/2008 for the course ECON 1120 taught by Professor Wissink during the Spring '05 term at Cornell.
- Spring '05