What happens to the amount of money in the private sector

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Reference no: EM133843403

Assignment:

Watch the film Finding the Money and answer the following questions.

Questions:

1. Why does the government (unlike a household) not need to collect tax or borrow money to spend money?

2. When the government runs a deficit (i.e. spends more than it collects in taxes) what happens to the amount of money in the private sector?

3. What are the benefits of government deficit spending to the private sector? Why does MMT argue that deficit spending can be beneficial rather than harmful to the economy?

4. According to MMT, as explained in Finding the Money, what causes inflation, and how does MMT suggest managing it? How does this perspective differ from more traditional views on inflation (i.e. "printing money causes inflation)?

5. What social goals can be accomplished through government spending if budget deficits are not a problem, according to MMT, as discussed in Finding the Money?

6. If MMT's perspective on public budget deficits is correct, why do people and policymakers still worry about deficit spending?

7. What did you learn from watching this movie and did it change your views on government spending and budget deficits?

Reference no: EM133843403

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