Consider the government debt at the beginning ofthe year 2010 equals $2 000, the annual interestrate on the government debt – 8%. Governmentexpenditures over the current year 2010 equal $1500, government transfers - 20% of output.Government income is 40% of output.Calculate the government debt burden(government debt to total output) at the end ofthe current year 2010 if the output equals $5 000.

A debt burden is a large amount of money that one country or organization owes to another and which…

S00, government transfers – 20% of output. Government income is 40% of output. Calculate the government debt burden (government debt to total output) at the end of the current year 2010 if the output equals $5 000.

S00, government transfers – 20% of output. Government income is 40% of output. Calculate the government debt burden (government debt to total output) at the end of the current year 2010 if the output equals $5 000.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider the government debt at the beginning of
the year 2010 equals $2 000, the annual interest
rate on the government debt – 8%. Government
expenditures over the current year 2010 equal $1
500, government transfers - 20% of output.
Government income is 40% of output.
Calculate the government debt burden
(government debt to total output) at the end of
the current year 2010 if the output equals $5 000.

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