How much of the nation's budget might be committed to defense during years of economic decline?...

How much of the nation's budget might be committed to defense during years of economic decline?

How much will America be able to spend on defense as demands on entitlements such as Social Security grow?

What impact will the War on Terror have on long-term defense spending?

Solutions

Expert Solution

a) At the time of economic decline in the market the government should spend more i.e. the government purchases has to increase in the market, to increase that the government can increase the expenditure on the defense goods

b) As the demand and entitlement for the social security grows in the market the defence expenditure will have to drop low, or it will lead to excess deficit that will be unsustainable for the economy.

c) War on terror will increase the defence spending because it will need more resources and co ordination among the nations of the world to tackle it.

Rahul Sunny answered 1 year ago

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