Macroeconomics, 9/e

Campbell R. McConnell, University of Nebraska, Lincoln
Stanley L. Brue, Pacific Lutheran University
Thomas P. Barbiero, Ryerson University

Deficits, Surpluses, and the Public Debt

Internet Application Questions


1		Go to: http://www.canoe.ca/CNEWSPolitics0002/29_goldstein.html. Read the article "Have a Big Mac on Paul Martin," and answer the following questions: According to the article, why was the Federal Government constrained in the amount of tax cuts it could give, even when Canada was experiencing rapid economic growth? Why is the interest on the debt so much of a concern for Canada? Explain with reference to the article. In what ways does the issue of debt reduction and tax cuts illustrate the basic economic concepts of scarcity, choice and opportunity cost? Explain.



2		Go to: http://www.compas.ca/html/archivesdocument.asp?offset=170&compasID=119. Answer the following questions: How many choices does each survey (Compas and Angus Reid Group) give respondents as to how the budget surplus should be used? Briefly outline the choices. Darrell Bricker, president of Angus Reid group, discusses the choices and trade-offs that must be made when discussing how to use the surplus. What are some of these trade-offs? What are some possible opportunity costs of committing parts of the surplus to health care? Debt reduction? Tax cuts? Explain briefly.

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