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Tugas Pertemuan 13
DISCUSSION QUESTIONS
1. List and discuss the real burdens of the public debt. Are there any benefits
associated with the debt? If so, what are they?
2. The queen of a small monarchy with an active export market wishes to know the
effects of alternative financing strategies on her “war on poverty.” Lay out the
options and explain the real consequences.
3. Discuss critically some proper and improper analogies between government finance
and debt, on the one hand, and individual and corporate finance and debt, on the
other.
4. What is meant by “discretionary” fiscal and monetary policy? What other types of
policy are there? Give examples. Who might criticize the use of discretionary policy,
and why?
5. “It is inconsistent for government, on the one hand, to stimulate production by
easing credit, and, on the other hand, to tax so harshly as to maintain a budget
surplus.” Explain in detail when this would be beneficial as well as consistent.
6. Explain how the public debt can be an international issue. What does the size of the
pubic debt represent? When do you think it is proper to borrow from (or lend to) the
next generations? What about the size of the debt service? How does that enter into
your deliberations?
7. Describe in detail the economic problems that can grow with the public debt, even if
it is completely owed to our own citizens.