Your Questions About Lower Debt Review

Michael asks…

Economics Review help please prt 2?

1. (TCO 5) Rising business investment and consumption will (Points: 5)
increase aggregate demand
increase aggregate supply

not change aggregate demand

None of the above

2. (TCO 6, 10) A major advantage of ‘automatic stabilizers’ is that (Points: 5)
they automatically produce surpluses during recessions and deficits during inflation.
they help stabilize the economy without having any effect on the personal income.
they simultaneously stabilize the inflation and reduce the absolute size of the public debt.
they require no legislative action by Congress to be made effective.

3. (TCO 6, 10) An increase in government spending and tax cuts would call for a: (Points: 5)
deficit during a period of demand-pull inflation
surplus during a period of demand-pull inflation
deficit during a recession
surplus during a recession

4. (TCO 6, 10) The ‘crowding-out effect’ from government borrowing is “reduced” when: (Points: 5)
interest rates are rising.
the economy is operating at full employment.
government spending improves human capital in the economy.
private spending is falling.

5. (TCO 6, 10) An increase in taxes and cut in government spending would be appropriate to curb (Points: 5)
demand-pull inflation
rising interest rates
fiscal deficits

6. (TCO 6, 10) Each of the following is an example of discretionary fiscal policy except (Points: 5)
public works spending
making the automatic stabilizers more effective
changes in tax rates
changes in interest rates

7. (TCO 5, 6) Most economists would agree that public debt should be reduced (Points: 5)
during both periods of recession and prosperity
just during periods of recession
just during periods of prosperity

8. (TCO 6, 10) Two ways to lower the budget deficit are to (Points: 5)
raise taxes and raise government spending
lower taxes and lower government spending
raise taxes and lower government spending
lower taxes and raise government spending

9. (TCO 7, 10) Which is most likely to be affected by changes in the rate of interest? (Points: 5)
tax multiplier
investment spending
government spending
the imports of the economy

10. (TCO 7, 10) Other things equal, the purchase of government bonds by the Federal Reserve will cause (Points: 5)
an increase in the money supply
an increase in interest rates
a decrease in the money supply
a decrease in commercial bank loans
a reduction in nominal GDP

11. (TCO 5, 6, 10) If automatic stabilizers kick in automatically, when real GDP falls, (Points: 5)
tax revenues and transfer payments both should fall
tax revenues and transfer payments both should rise
tax revenues should fall and transfer payments should rise
tax revenues should rise and transfer payments should fall

12. (TCO 5, 6, 10) During time of inflation, we want to (Points: 5)
raise taxes and run budget deficits
raise taxes and run budget surpluses
lower taxes and run budget surpluses
lower taxes and run budget deficits

13. (TCO 5, 6, 10) The effect of big tax cuts on the real GDP of a weak economy is (Points: 5)
strengthened by the crowding-out effect
weakened by the crowding-out effect
reinforced by reducing MPC (Marginal Propensity to Consume)
none of the above

14. (TCO 5, 6, 10) Government spending can be financed by all of the following “except” (Points: 5)
personal income taxes
investment spending
government borrowing
money creation
excise taxes

15. (TCO 8) A tariff on a product (Points: 5)
makes domestic sellers better off and domestic buyers worse off.
makes domestic sellers worse off and domestic buyers worse off.
makes domestic sellers better off and domestic buyers better off.
makes domestic sellers worse off and domestic buyers better off.

16. (TCO 8) Each of the following would reduce our trade deficit except (Points: 5)
increasing saving
decreasing oil imports
increasing investment
raising interest rates

17. (TCO 9) If the dollar price gets “weaker,” (Points: 5)
the U.S. trade deficit will rise.
the U.S. trade deficit will fall.
the U.S. trade deficit will be unchanged.
None of the above necessarily happens.

18. (TCO 9) If the supply and demand for currency deter

richmama answers:

1. 1
2. 4
3. 3
4. 4
5. 1
6. 4
7. 3
8. 3
9. 2
10. 1
11. 3
12. 2
13. 3
14. 2
15. 1
16. 3
17. 2
18. Don’t know,

Carol asks…

Annual Review – The more experience the better…?

This is probably a question that gets asked a lot, but I’m going to ask anyhow.

I have an upcoming annual review – this will mark the 6th year I’ve spent with my company. In that time I have had a lot of successes and (a few) failures, and a lot of disappointments such my company deciding to renege on a promise to pay for some graduate work that left me $25K in debt…Anyway, considering all of this, plus the fact that I’m the lowest paid in my current role (this is believed to be the case based on pretty realiable market sources) I’m hoping to make a case that I’ll be getting a decent bit more than an “annual cost of living” increase. Not a promotion naturally, but something in between that makes my salary more competitive relative to me peers.

When is the best time to go about this ? On the spot, or in advance of the review ?
What is the best way to go about this ? Just brining up my disposition and lining out a case, or asking ‘hey, what is the payscale for this position? I feel as though I’m getting the short end of the stick.’
What are the chances of success and what can I expect ?

Look I know people still have double dip recessionary fears, and people (wisely) try and run with lean budgets, but I can’t think of a reason not to pay people with comparable skills comparable amounts…In any managerial position I’ve ever had, I always tried and make a point to do so…You don’t want to overpay, but you don’t want to underpay either…And you get 150% more out of people that you don’t fight with over a few thousand $, which makes a well justified decision.

Am I missing something here? Any commentary would be appreciated.

richmama answers:

Don’t ASK someone about the pay scale… You need to do the research. You need to say, “According to my research, 3 different sources quote the average pay for _________ with 6 years of experience is between $__k and $__k. Currently, I am making $__k and I feel that in order for me to feel stable at this company, I will require at least $__k.”

I understand you have a long history with this company, but they’ve done you wrong by denying you the benefits they promised with tuition reimbursement. If they can’t provide you with what you are worth, I’d start shopping around. Sometimes, switching companies is the only way to get a raise in this economy.

Steven asks…

Bank of Canada concerned about government, household debt, Is this a joke of the day?

OTTAWA – Mounting governmental and household debt are posing new risks to the stability of financial systems, the Bank of Canada said Thursday in its most recent analysis.
The central bank’s semi-annual “Financial System Review” finds that overall conditions have improved in the short term since it last reported in June.But it adds that record-high debt by Canadian households pose an elevated medium-term risk if a second financial or economic shock were to materialize. Bank of Canada governor Mark Carney has warned in the past about Canadians getting in over their heads with large mortgage commitments that don’t appear problematic given today’s low interest rates.

If the Government is worried about the general public- 1. they would not impose new taxes e.g. house taxes, HST and other taxes, 2. Would control increase in auto insurance what they always made false promises during elections, 3. Would control increase toll on 407 which was the property of the Canadian people and sold to their sweethearts.4. They would never increase their pay by 25% without public opinion. Usually Canadians are too busy to earn their bread and butter that they do not have time to oppose government’s decision. Even if we oppose nothing would happen. Love you Canada. O Canada, O Canada

richmama answers:

The household debt is Canada is high but our economy is in better shape than US or EU countries. Our banks are solid and real estate prices are rising. We do not have high unemployment, bankruptcies, foreclosures, bank failures or TARP as in US. The lower interest rates are giving the consumers incentive to get loans to buy property and consumer goods.

John asks…

HELP,I am debating on using a credit settlement company or debt management company, what were your experiences?

I make my payments on time every month to my cards, but wont be able to soon.
I have reached out to my 2 credit cards numerous times telling them I may file for bankruptcy and they wont get anything, and asking for them to lower interest rate so I can make my monthly payments and actually see my balance go down instead of mostly toward interest. I was refused on any time of payment plan, settlement offer, or interest rate reduction.
NEXT: I spoke at length with Take Charge America, who will set me up on a 5 year payment plan (after the banks negotiate with THEM apparently), and I will pay off my full balance in 5 years, along with about $4k in interest and $2400 or so in fees to the company. Cards will be closed.

OR: I use Credit Solutions and I default on my cards so they can negotiate with the banks on my behalf and present me with settlement amounts which could be half if not more of the balance! I pay them $200. for 18 months and my debts to cards is paid within 36 months, if not sooner, at almost $12k less than what I owed.

BUT: Credit solutions has many scary reviews online. I spoke at length with 2 of their reps and they explained the process to me and it sounds like garden variety debt settlement, so.. i dunno. Which company? Anyone have any experience with either?

I also just called the collection dept. of my cards again and told them all this, can THEY offer me a settlement or payment plan so that there are no 3rd parties and the bank gets their money. They said nope, sorry. So i am kind of backed into a corner of having to use one or the other

richmama answers:

Debt settlement programs like Credit Solutions involve deliberately ceasing payments to all your creditors to force your accounts into default to attempt settlements for less. The monthly payments you make go towards building a settlement account and to pay the firm’s fees. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating. You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment. If you end up being sued….you’ll be on your own.
Many people have the incorrect impression that debt settlement firms have the power to force settlements…they don’t. Your creditors are not obligated to take any settlement for less from anyone. Many credit card card companies refuse to work with debt settlement firms.

If you’ve decided to go with debt settlement in spite of the risks, then you can do this on your own. You don’t have to pay any firm to trash your credit rating in order to settle for less. You can trash your credit rating for free by ceasing all your credit card payments. Use the money you save to put in a settlement account to settle your debts in the 25-50% range. Same warnings apply: Your creditors might respond to your deliberate defaults by serving you a summons and taking you to court.

– They will only offer settlements if you can only pay them really fast…like within 3 months at least. They won’t let you pay a settlement for less if you can only pay in small amounts per month
Bottom line: If you have very large credit card debts that are out of control and you’ve exhausted all self help options…and you don’t have any money to settle the debts…. Then there are really only 2 options…Non profit debt management like the “Take Charge America” plan through CCCS…or filing for Chapter 7 bankruptcy. Take a hard look at the payment proposal from “Take Charge America.” If the payment terms are still impossible, then contact a bankruptcy attorney to file Chapter 7.

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