Objectives of A Budget in A Government

Q1. Define fiscal policy and its key objectives. What government agencies are responsible for making decisions on fiscal policy actions and implementations.

Q2. Define monetary policy and its key objectives. What government agency (s) is (are) responsible for making decisions on monetary policy actions and implementations?

Q3. Distinguish between budget deficit and public debt with an example from actual data from the US government budget office discussed at the beginning of this chapter. Give at least three reasons why the budget deficit and public debt has been continuously rising since 2001

Q4. Give at least two reasons why a balanced budget approach for the US economy is not a realistic approach in the short-run despite political advocacy to bring the budget to a balanced budget?

Q5. Describe the role of policy mix of fiscal and monetary policy actions in stabilizing inflation, unemployment, and RGDP growth for the economy.

Q6. List of a few arguments for and against “discretionary” fiscal and monetary policy actions by different groups in the economics profession and business entities (and also by politicians). How do they differ from the advocacy for adopting passive “rules” of economic policy? Give real-world examples in your answers in the context of the US economy.