Discuss the following questions and prepare a final answer : 1.How do you expect COVID-19 to affect Economic Growth: for Canada and for the World in general? 2.Budget Deficit in light of COVID-19: What it means for Canada?
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Discuss the following questions and prepare a final answer :
1.How do you expect COVID-19 to affect Economic Growth:
for Canada and for the World in general?
2.Budget Deficit in light of COVID-19: What it means for
Canada?
Step by step
Solved in 4 steps
- In view of the large adverse impact of COVID-19 on the world economy, many governments have implemented expansionary fiscal policy. Together with a decrease in tax revenues, the governments have sufferedlarge deficits. How does a government deficit affect the interest rate, the quantity of loanable funds and economic growth? Explain your answers with a diagramExplain how decreased domestic investments that occur due to a budget deficit will affect future economic growth.Explain how the government can use fiscal policy for capital formation in the process of economic development. Thanks.
- China has seen a steep rise in total debt from 150% of GDP in 2008 to 250% today (the Economist, Nov. 15, 2018). Suppose the Chinese government addresses this with a package of spending cuts. (a1) What is the effect of China’s fiscal policy on the national saving rate? Use the Solow growth model to predict the effects on China’s steady-state income per capita. (a2) How does your answer change if the fiscal policy reduces government activities that have productivity effects? Please justify your answers along with drawing the graph of the Solow growth model.In 2020, the World Bank and International Monetary Fund (IMF) have been deeply apprehensive of government debt defaults of developing countries due to COVID-19. Discuss why, when a leading developing country government defaults on its loan from a foreign country, interest rates on bonds issued by many other developing countries will rise and cause widespread harm to the world economy. (Use a loanable funds market diagram in your answer.)Other things equal, when the government runs a large budget deficit, it _____ national saving and thereby _____ capital formation and productivity growth. a) increase;increase b)decreases;decreases c)increase;decreases d;decreases;increases
- Examine the consequences for a hypothetical developing economy if the rate of borrowing to fund a fiscal deficit is growing annually at a faster rate than the GDP. use hypothetical numbers and percentages.N5 Identify and discuss the general ways in which companies can increase their profitability and profit growth through global expansion.Q4.1) Evaluate the role of government in facilitating economic growth and development. There arenumerous classic theories and models of economic growth and development thatgovernments use. Briefly evaluate these theories and models.
- propose 2 reasons why government should emphasize economic growth as a part of its mandateIn 2010 the Greek government had to inform the European Commission on how it would control its budget deficit and improve the performance of its economy. The government’s debt is so high that agencies assessing the creditworthiness of the government downgraded it (which would mean more interest has to be paid to raise finance). Proposals were likely to include a 10% cut in government spending. Questions What actions can the government take to increase national income growth in Greece? If the Greek economy is in recession what would you expect to be the effect on: a) Inflation? b) Unemployment? c) Imports? Explain your answers.Propose TWO (2) reasons why government should emphasize economic growth as a part of its mandate.