Why does Keynesian economics advocate government spending during a recession

What is the difference between expansionary fiscal policy and contractionary fiscal policy?

How do automatic stabilizers avoid the limitations that affect discretionary fiscal policy?

Why does Keynesian economics advocate government spending during a recession?

What economic problems does supply-side economics try to address simultaneously?

How does government finance deficit spending?

How does deficit spending contribute to the national debt?

Look at the bar graph below showing national debt as a percentage of GDP in several countries. Which European countries on this graph have lower ratios of debt to GDP than the United States?

Look at the bar graph below showing national debt as a percentage of GDP in several countries. How does U.S. debt compare to Japans debt as a percentage of GDP?

Analyzing Cause and Effect In early 2001, the federal budget had shown surpluses for the previous three fiscal years and was predicted to continue to do so. The President and Congress thought the best thing to do was to return some of the surplus to taxpayers through tax cuts. How would supply-side economics describe the expected outcome of these tax cuts?

Applying Economic Concepts Suppose that you got a better job that increased your take-home pay each week from $250 to $300. Assume that you spent 80 percent of that increase. Give specific examples to show how your spending would create a multiplier effect.

Drawing Conclusions Recessions in 19901991 and in 2001 lasted about eight months each and were relatively mild in their effects on the overall economy. Why would policy lags limit the effectiveness of discretionary fiscal policy in bringing the country out of such recessions?

Making Inferences Between 1998 and 2001, the annual federal budgets showed surpluses, and the amount of national debt held by the public decreased by about $450 billion, yet the total federal debt grew by about $400 billion during that same time period. What do you think accounts for this difference?

Challenge In 1997, some members of Congress proposed a constitutional amendment that would require the federal budget to be balanced each year. Opponents argued that such an amendment would make recessions worse by requiring the government to use contractionary fiscal policy during such times. Why would a balanced budget require that kind of fiscal policy?