Chapter Questions
Explain the government's budget constraints.
Inflation tax reduces the inflation in economy. Explain in detail.
What is the relationship of deficit and hyperinflation?
Explain the relationship of the budget deficit and public debt.
Write a note on the Laffer curve.
How can the deficit be financed? What is the mechanism for it?
Write a note on the debt management of government?
Explain the dynamics of debt and deficit.
What is Borrow Ricardo problem?
Write a note on the burden of debt? What policies are required to get rid of this debt?
Size of debt matters for an economy. What is the role of welfare programs in government budget?
Explain the merged bank fund model in detail.
Write note on followinga) Polak fund modelb) Bank Modelc) Gradualismd) Credibilitye) Gradualismf) Credibility
What is a rule versus discretion concept? Explain.
Explain the following lags in detail.a) Inside lagsb) Outside lagsc) Monetary and fiscal policy lags