The federal government recently ran a budget surplus

Reference no: EM13696177

The federal government recently ran a budget surplus, but has since returned to running a budget deficit.

Explain why reducing the budget deficit can cause short-term pain in the form of lower employment, higher unemployment, and a recession.

Explain why expansionary monetary policy would help decrease the likelihood of a recession if it were adopted at the same time the budget deficit was being reduced.

Present an analysis that identifies any long term gains which could result from a reduction in the budget deficit. (Analyze the composition of output.)

PLEASE HELP ME! It's my final study guide.

Reference no: EM13696177

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