In this lesson, our instructor Jibin Park gives an introduction on budget deficits and the national debt. He discusses the budget balance, cyclically adjusted budget balance, problems of a rising government debt, historical debt and gdp ratio, trends in debt-gdp ratio, and implicit liabilities.
The government savings equation is as follows Sgovernment = T – G – TR
T = Taxes, G = Government Purchases, TR = Government Transfers
Expansionary fiscal policies reduce the budget balance (increase deficit) while contractionary fiscal policies increase the budget balance (decrease deficit)
Many economists argue that a balanced budget amendment to the Constitution would restrict the government’s ability to enact fiscal policy during a recession
The National Debt in February 2014 exceeded $17.3 trillion
The Debt-GDP ratio is oftentimes used to determine whether debt is excessive or not
Implicit liabilities are not included in official debt statistics
The three biggest implicit liabilities of the federal government include Social Security, Medicare and Medicaid
Budget Deficits & the National Debt
Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.
This book created a 5-step plan to help you study more effectively, use your preparation time wisely, and get your best score. This book includes two full-length practice exams modeled on the real test, all the terms and concepts you need to know to get your best score, and your choice of three customized study schedules.
This book includes an in-depth preparation for both AP economics exams. It features two full-length practice tests, one in Microeconomics and one in Macroeconomics, and all test questions answered and explained. It also features a detailed review of all test topics, which include: supply and demand, theory of consumer choice, economics in the public sector, costs, perfect and imperfect competition, monopolies, labor resources, game theory, the national income and gross domestic product, inflation and unemployment, fiscal policy, money and banking, monetary policy, economic growth, international trade and exchange, interest rate determination, and the market for loanable funds.