Suppose all tax collections are fixed (instead of dependent on income) and all spending and transfer programs

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Suppose all tax collections are fixed (instead of dependent on income) and all spending and transfer programs are fixed (in the sense that they do not depend on the state of the economy, as, for example, unemployment benefits now do). In this case, would there be any automatic stabilizers in the government budget? Would there be any distinction between the full-employment deficit and the actual budget deficit? Explain.

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Principles of Macroeconomics

ISBN: 978-0134078809

12th edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

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