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Eco 372 Fiscal Policy Team Paper

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Fiscal Policy Paper
According to Colander (2010), a “deficit is a shortfall of revenues under payments and a surplus is an excess of revenues over payments” (p. 406). A debt is normally money that is owed or due and in the United States for Fiscal Year 2013 the budget deficit was projected at $901 billion, however, debt was more than $16 trillion at the end of 2012 (about.com, 2012). The state of the economy is what dictates the view of what is provided by economist in terms of potential output of goods. To stimulate the economy whenever possible it is best to run surpluses or at the very least balance a budget.
Unemployed individual
During a surplus, deficit or debt an unemployed individual is greatly affected and has a profound effect on unemployed individuals. During a deficit or when the government is experiencing large debt companies lay employees off to cut spending so there are fewer jobs on the market. An individual will have to make greater effort in finding comparative employment, accept temporary employment or collect unemployment to survive with fewer jobs on the market. Unemployed individuals will discover that finding employment is competitive and individuals who previously acquired a specific level of education will find themselves vying for positions against candidates possessing all levels of experience and education. Unemployment will decrease the amount of liquid cash in the economy, thereby, lowering demand and supply of goods impacting monetary policies. Unemployed individuals have less money to spend in terms of housing, food and transportation that directly affect the economy. The United States seized responsibility for unemployment with the Employment Act of 1946 (Colander, 2010) and have put in place programs such as Welfare to help. During a surplus there are similar challenges although not necessarily on the opposite side of the

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