Use Figures 1.8 and 1.9 to determine why the total government deficit was large during the 20082009

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Use Figures 1.8 and 1.9 to determine why the total government deficit was large during the 2008€“2009 recession. Was the deficit large because taxes fell, because spending rose, or both?

Figure 1.8:

38 36 Spending 34 32 30 28 26 Taxes 24 22 20 18 1940 1950 1960 1970 1980 1990 2000 2010 2020 Year Percentage of GDP

Figure 1.9:

6. 4 -2 -6 -8 -10 -12 1940 1950 1960 1970 1980 1990 2000 2010 2020 Year Percentage of GDP

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Macroeconomics

ISBN: 978-0134472119

6th Edition

Authors: Stephen D. Williamson

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Question Posted: Dec 01, 2018 07:45 AM

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Use Figures 1.8 and 1.9 to determine why the total government deficit was large during the 20082009

Question:

38 36 Spending 34 32 30 28 26 Taxes 24 22 20 18 1940 1950 1960 1970 1980 1990 2000 2010 2020 Year Percentage of GDP 6. 4 -2 -6 -8 -10 -12 1940 1950 1960 1970 1980 1990 2000 2010 2020 Year Percentage of GDP

Step by Step Answer:

Both During the recession taxes fell and spending rose Some of this occurred ...View the full answer

Macroeconomics

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