Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 33, Problem 1SPPA
To determine
To explain:
The way a government budget deficit and debt can impend the financial stability and can cause the job of the central bank more difficult.
Expert Solution & Answer
Explanation of Solution
When the government budget is at deficit it will make the country vulnerable and instable.This could lead to pressurize the central banks as they should provide the necessary money needed. Furthermore, when the country is not stable the central bank could be attacked as it is also in that country. When the government is at debt, it will ask for money from the central bank and the bank should provide the government with necessary money that is needed and this could make the centrals bank's job harder as the bank should allocate the money properly according to what it has in it reserves.
Economics Concept Introduction
Deficit:
A deficit takes place when the government spending is more than the revenue and the total of all the deficits that took place before is the debt of the state.
Quantitative easing:
Quantitative easing is known as the large-scale asset purchasing. It is the
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Chapter 33 Solutions
Foundations of Economics (8th Edition)
Ch. 33 - Prob. 1SPPACh. 33 - Prob. 2SPPACh. 33 - Prob. 3SPPACh. 33 - Prob. 4SPPACh. 33 - Prob. 5SPPACh. 33 - Prob. 6SPPACh. 33 - Prob. 7SPPACh. 33 - Prob. 8SPPACh. 33 - Prob. 9SPPACh. 33 - Prob. 10SPPA
Ch. 33 - Prob. 11SPPACh. 33 - Prob. 1IAPACh. 33 - Prob. 2IAPACh. 33 - Prob. 3IAPACh. 33 - Prob. 4IAPACh. 33 - Prob. 5IAPACh. 33 - Prob. 6IAPACh. 33 - Prob. 7IAPACh. 33 - Prob. 8IAPACh. 33 - Prob. 9IAPACh. 33 - Prob. 10IAPACh. 33 - Prob. 11IAPACh. 33 - Prob. 12IAPACh. 33 - Prob. 1MCQCh. 33 - Prob. 2MCQCh. 33 - Prob. 3MCQCh. 33 - Prob. 4MCQCh. 33 - Prob. 5MCQCh. 33 - Prob. 6MCQCh. 33 - Prob. 7MCQ
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