Although economists assess economic downturns primarily in terms of the reduction in aggregate output of final goods and services, the public pays greatest attention to the rate of unemployment. Ever since the Great Depression, it seems, people have lived in mortal fear of having their current employment terminated, and politicians have come to evaluate every...
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A student recently asked me “why do the annual federal budget deficits not match increases in the national debt.” It is an excellent question, since the national debt is a stock, and the deficit (or surplus) is the annual flow altering that stock. As we will see, the answer takes on particular significance in...
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