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    What possible macroeconomic arguments might George Bush use to defend his tax cuts at this time?

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    Please read the attached and answer the follows.

    A) What possible macroeconomic arguments might George Bush use to defend his tax cuts at this time.

    B) Why do you think the IMF is concerned that these tax cuts may be bad economic policy, and not just for the US, but for the world economy?

    C) What would happen to the growth rate of the money supply if foreigners lost confidence in the US dollar as a result of passage of Bush's tax cut package and the Fed was trying nonetheless to maintain its current low federal funds rate target? Explain briefly.

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    A) Tax cuts spur consumption, which fuels economic growth.

    B) Tax cuts without lowered government spending creates huge budget deficits, which must be financed with more government bonds at higher interest rates. This would also make the US more indebted to foreign bond ...

    Solution Summary

    This solution briefly discusses the reasoning behind the economic theory in these cases in 187 words.

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