Answer to Question #213712 in Microeconomics for Y. McGee

Question

Define or explain what “fiscal sustainability means. (2) What factors or elements must be considered in determining whether fiscal sustainability is being met? (3) Identify and explain at least three approaches that administrators use to reduce budgets to meet fiscal sustainability.

Answer 1

1.

Fiscal sustainability is how a government is able to maintain its current spending and other policies without being problematic to promised expenditures or its liabilities, in the long run.

2.

Being able and willing to make the delivery services to the public better.

Being able and willing to produce enough resources for the future.

Being able and willing to make the delivery of public service better.

3.

Budget scenarios. These involve intermediate, low and high revenues and spending.

Revenue options. This is dependent on whether the nation follows the sustainability path that revenues and spending close to their recent levels of history.

Spending options. These include social security and defense, domestic spending and medicare.