27. Let the government increase spending by 10$ with a money multiplier of 3. What is the total amount of debt? What is the total new income? Let the tax rate = 10%. How much of the new income comes back to the government? How much is added to the deficit? 28. Let potential income (X") 10$ Trillion and actual income (X^) = 9.8$ Trillion. What is the structural deficit in both trillions and billions of dollars? Let the tax rate = 10%. Identify the passive deficit and the actual deficit. Show your work!
27. Let the government increase spending by 10$ with a money multiplier of 3. What is the total amount of debt? What is the total new income? Let the tax rate = 10%. How much of the new income comes back to the government? How much is added to the deficit? 28. Let potential income (X") 10$ Trillion and actual income (X^) = 9.8$ Trillion. What is the structural deficit in both trillions and billions of dollars? Let the tax rate = 10%. Identify the passive deficit and the actual deficit. Show your work!
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter30: Government Budgets And Fiscal Policy
Section: Chapter Questions
Problem 51P: A government starts off with a total debt of $3.5 billion. In year one, the government runs a...
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![27. Let the government increase spending by 10$ with a money multiplier of 3. What is the total amount of debt? What is
the total new income? Let the tax rate = 10%. How much of the new income comes back to the government? How
much is added to the deficit?
28. Let potential income (X") 10$ Trillion and actual income (X^) = 9.8$ Trillion. What is the structural deficit in both
trillions and billions of dollars? Let the tax rate = 10%. Identify the passive deficit and the actual deficit. Show your
work!](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faa06c95a-2d5b-4a88-b257-05d2a3cf0f3d%2Ff419ee39-e0d8-4389-87d2-92062b2b6bfe%2Fhnaqpo9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:27. Let the government increase spending by 10$ with a money multiplier of 3. What is the total amount of debt? What is
the total new income? Let the tax rate = 10%. How much of the new income comes back to the government? How
much is added to the deficit?
28. Let potential income (X") 10$ Trillion and actual income (X^) = 9.8$ Trillion. What is the structural deficit in both
trillions and billions of dollars? Let the tax rate = 10%. Identify the passive deficit and the actual deficit. Show your
work!
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