Based on the national saving and investment identity, what are the three ways the macroeconomy might react to greater government budget deficits?
How would you expect larger budget deficits to affect private sector investment in physical capital? Why?
What are some of the ways fiscal policy might encourage economic growth?
What are some fiscal policies for improving a society’s human capital?
What are some fiscal policies for improving the technologies on which the economy will have to draw in the future?
Explain how cuts in funding for programs such as Head Start might affect the development of human capital in the United States.
What is the theory of Ricardian equivalence?
What does the concept of rationality have to do with Ricardian equivalence?
Under what conditions will a larger budget deficit cause a trade deficit?