1. How could a greater fiscal deficit create a greater trade deficit? 2. What would you do to reduce the deficit? 3. What is the opportunity cost of government spending on servicing the interest on...

1.        How could a greater fiscal deficit create a greater trade deficit?

   2.        What would you do to reduce the deficit?

   3.        What is the opportunity cost of government spending on servicing the interest on the debt.

   4.        If the federal government wished to reduce the deficit to any significant degree

              without raising taxes, where would the reduced spending likely to have to come from?

   5.        Assume the federal government replaces the federal income tax with a sales tax

              placed on consumption expenditures.  Analyze the impact of this tax change

              on taxation efficiency and equity.