MACRO ASSIGNMENT 3

MACRO ASSIGNMENT 3 - Karina Santana April 27, 2011...

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Unformatted text preview: Karina Santana April 27, 2011 Macroeconomics HW#3: Chapter 16 problem 6 Concerned about the crowding-out effects of government borrowing on private investment spending, a candidate for president urges that the United States should print money to cover the governments budget deficit. What are the advantages and disadvantages of such a plan? There are many more disadvantages then there are advantages if we were to print more money in order to cover for governments budget deficit. The advantages that may occur is that the employment rate will increase. This is because since there is technically more money circulating then employers can afford to keep their employees. One advantage that people might like is that their income will technically increase, but that would mean that everything else will increase as well. In reality, printing more money might seem like an easy and simple fix, but what it does is that it leads to inflation. There are some individuals who believe that everything what it does is that it leads to inflation....
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This note was uploaded on 10/12/2011 for the course ECON 2100 taught by Professor Sardy during the Spring '11 term at CUNY Brooklyn.

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MACRO ASSIGNMENT 3 - Karina Santana April 27, 2011...

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