What we mean by the governments budget

Reference no: EM13732017

By late 2009, Greece's national debt had grown so large relative to the size of its economy that lenders had lost confidence in the Greek government's capacity to service it. Fear of a Greek default led to contagion - Spain, Italy, Portugal, and Ireland were all subject to the disapproving glare of frightened lenders. The crisis caused seismic disruption in Europe and the rest of the world.

The International Monetary Fund, the European Commission, and the European Central Bank reluctantly offered Greece bail-out loans - but with strings attached. In order to get the money, Greece had to agree to austerity measures. In this context, austerity means tight fiscal policy - that is, higher taxes and/or lower government spending in order to shrink Greece's annual budget deficit.

Using your knowledge of the impact of the government's budget on the equilibrium level of real GDP, and your understanding of the effect of the economy on the state of the government's budget, explain why austerity measures usually result in less improvement in the government's budget position than policymakers had hoped for. Be sure to define what we mean by 'the government's budget.

Reference no: EM13732017

Questions Cloud

Explain why they are successful in this marketing effort : Briefly research and share a company who you feel "gets" supply chain management. Explain why they are successful in this marketing effort

Where do you think strategy originates from : In other words, where do you think 'strategy' originates from? Please post up to 200 words discussing the origins of 'strategy' and it's relevance to business. No plagiarism please.

What is mental accounting and how does it impact : What is mental accounting and how does it impact consumer decision making and How might a company take advantage of consumers' mental accounting

What are the differences in the ways project managers : What are the differences in the ways project managers, accountants, and financial comptrollers perceive the expenses of a project

What we mean by the governments budget : Explain why austerity measures usually result in less improvement in the government's budget position than policymakers had hoped for. Be sure to define what we mean by 'the government's budget.

Identify the key characteristics of their products : Identify the key characteristics of their products and services and their significance to the market and Review pricing policy and analyse pricing variables to determine their effect on demand

Explain a cutting edge educational technology : The focus is on educational technologies. Please submit a brief 2-3 page report on a cutting edge educational technology (of your choice). You can choose a technology that you think has had the biggest impact, something you are interested in, or s..

Types of professional resumes : Here's a chance to create a Resume. The idea here is to create a concise and effective way to promote who you are as a business professional.

Develop financial pro forma : The next five assignments allow you to: invent an entrepreneurial company and research it; develop financial pro forma; do an executive summary and elevator speech; and, as the capstone of the project, develop an exciting presentation for investor..

User Account

All Pages