Please Solve This One Suppose a country has no public debt in year 1 but experiences a budget deficit of $40billion in year 2, a budget deficit of $30 billion in year 3, a budget surplus of $10 billion inyear 4, and a budget deficit of $2 billion in year 5.a. What is the absolute size of its public debt in year 5?b. If its real GDP in year 5 is $104 billion, what is this country's public debt as a percentageof real GDP in year 5?

In Year 1, the nation maintained a zero public debt status. Nevertheless, it incurred deficits of…

Answered: Suppose a country has no public debt in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose that an estimate of U.S. federal spending showed that 46% was for entitlements, 18% was for defense, 15% was for grants to states and localities, 14% was for interest on debt, 6% was for other federal operations, and 1% was for deposit insurance. Construct a pie chart to show this information.
6. If the U.S. runs a current account deficit next year, which of the following are necessarily true: A) U.S. will have to run a government budget deficit B) The Central Bank of China will have to buy U.S. treasury bonds C) The U.S. will import more goods and services than it exports D) U.S. national saving will be less than U.S. national investment
Public debt arises as a result of financing successive budget deficits through borrowing. The public debt stock as at March 2020 stood at GHC 236.1 billion according to the Bank of Ghana. There have been arguments for and against borrowing by government and the opposition all these years depending on where they find themselves.As a student of Public Finance, is borrowing good or bad? Justify your position by coming out with all the relevant arguments for and against your decision.
Country A's income receipts are $300 billion, and income payments are $250 billion. Despite this, country A is a debtor nation. How can country A receive more income than it paid out? Use a formula to answer the question.
If national income Y = 10,500, disposable income Yd = 8,500 , consumption is C = 8,000, transfer payments TR = 150 and the budget deficit is BD = 200, what is the level of private domestic investment, I ? (please insert the round number without the Euro symbol)
(b) Given that nothing else is borrowed in the near future, the length of time it will take a government to completely eliminate its stock of debt will be entirely dependent on how much more annual repayments exceed the annual interest expenses. The interest expense portion of the debt is a function of the present stock of debt, y, and is given by i(y) %3D у — у? The amount of money that the government repays to reduce its debt stock is assumed to be a fraction, a, of the present stock of debt. Repayment is done at the end of each financial year. (i) (ii) Solve for the present stock of debt, y, as a function of t. What will happen to government debt as t → o? Justify your response.
1. In order to reduce its current-account deficit, the United States would NOT do which of the following? a . raise national product relative to national spending b. decrease savings relative to domestic investment c . increase savings relative to domestic investment d . reduce the federal budget deficit
Table 2 shows the elements of national income accounts of a country. The economy is in equilibrium. Accounts Consumption (total) Investment Government Expenditures Imports Exports £bn 80 12 8 10 16 A) What is the current equilibrium value of national income? B) What are the levels of injections and withdrawls? C) Assume that the national income rises to £108 bn and the consumption of the domestically produced goods rises to £72 bn. What is the marginal propensity to consume (use 2 decimal places)? D) What is the multiplier for this economy? E) Comment on the results in part c) ad d).
U.S. total public debt stood at $27.7 trillion as of Q4 2020 or about $86,000 per person in the US. It seems that this number is very large and we should be concerned about it. a. When we start to think about who actually owns U.S. debt, does $27.7 trillion seem like the appropriate figure for how much debt we owe to private individuals or organizations? b. Many people do not want increases in federal deficits and debt because they fear that their grandkids and future generations in general will have to pay it back. Why should they not worry about this?
The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $1,110 million. Enter the amount for consumption. National Income Account Government Purchases (G) Taxes minus Transfer Payments (T) Consumption (C) Investment (I) Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table. National Saving (S) = Public Saving Y-T-G S Value (Millions of dollars) 300 240 Y-C-T $ Complete the following table by using national income accounting identities to calculate private and public saving. In your calculations, use data from the initial table. Private Saving million million 210 million Based on your calculations, the government is running a budget
If the U.S. Treasury deposits income tax receipts into its account at the Federal Reserve, then a. the money multiplier will decrease b. the money multiplier will increase c. the monetary base will decrease d. the monetary base will increase Expected inflation can be estimated as a. the return on a TIPS bond b. the return on a Treasury bond c. the return on a TIPS bond minus the return on a Treasury bond d. the return on a Treasury bond minus the return on a TIPS bond A decrease in the expected return on stocks will a. shift the demand curve for bonds leftwards b. shift the demand curve for bonds rightwards c. shift the supply curve for bonds leftwards d. shift the supply curve for bonds rightwards Which of the following is part of M2? a. Small time deposits b. Money market mutual funds c. Currency held by foreigners d. All of the above
Suppose that a country has a trade surplus of $50 billion, a balance on the capital account of $10 billion, and a balance on the current account of −$200 billion. The balance on the capital and financial account will be: a. $10 billion. b. $50 billion. c. $200 billion. d. −$200 billion.

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