Imagine that Congress passes a constitutional amendment requiring the U.S. government to maintain a balanced budget at

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Imagine that Congress passes a constitutional amendment requiring the U.S. government to maintain a balanced budget at all times. Thus, if the government wishes to change government spending, it must always change taxes by the same amount, that is, ∆G = ∆T Does the constitutional amendment imply that the government can no longer use fiscal policy to affect employment and output?

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International Economics Theory and Policy

ISBN: 978-0273754206

9th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz

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