Explore BrainMass

Need help answering questions need by tonight

Need help answering questions, I am stuck. Each answers should be 2 paragrahs minimum. Please help, attached is the article.

1.Is it possible to do both?

2.Should a leader worry more about the short term (more consumption) or the long term (more savings)?


Solution Preview

1. It is possible to have higher spending and higher savings: but only in absolute terms, and not in proportion terms. Therefore, it is possible to save more dollars and spend more dollars, but it is not possible to save a large portion of your income and at the same time spend a large portion of your income. The idea here is that higher saving and higher spending can both be supported if the income is higher, but not otherwise. Therefore, any action that the government takes to encourage savings and consumption will not be effective if real incomes do not rise. The only way for real incomes to go up is if the companies start hiring, and that is the biggest question facing the economy today.

The government stimulus across nations has brought the fall to a possible end, but the problem is that in the process the governments have gone deep in red with huge budget deficits. This is all the more problematic since most major economies were already facing a budget deficit, and the increased spending over the last ...