Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion in year 2, a budget surplus of $10 billion in year 3, and a budget deficit of $2 billion in year 4. Instructions: In part a, enter your answer as a whole number. For the absolute size of the public debt, enter your answer as a positive number. In part b, round your answer to 2 decimal places. a. What is the absolute size of its public debt in year 4? 24 billion b. If its real GDP in year 4 is $104 billion, what is this country's public debt as a percentage of real GDP in year 4? percent

Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion in year 2, a budget surplus of $10 billion in year 3, and a budget deficit of $2 billion in year 4. Instructions: In part a, enter your answer as a whole number. For the absolute size of the public debt, enter your answer as a positive number. In part b, round your answer to 2 decimal places. a. What is the absolute size of its public debt in year 4? 24 billion b. If its real GDP in year 4 is $104 billion, what is this country's public debt as a percentage of real GDP in year 4? percent

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose a government has no debt and a balanced budget. Suddenly it decides to spend $5 trillion while raising only $4 trillion worth of taxes. Instructions: Enter your responses rounded to one decimal place. a. What will be the government's deficit? 24 1000 billion b. If the government finances the deficit by issuing bonds, what amount of bonds will it issue? $4 1000 billion C. At a 3 percent rate of interest, how much interest will the government pay each year? $4 30 billion d. Add the interest payment to the government's $5 trillion expenditures for the next year, and assume that tax revenues remain at $4 trillion. In the second year, compute the () Deficit: $ billion (ii) Amount of new debt (bonds) issued to finance the deficit in the second year: $ billion (iii) Total debt at the end of the second year: $ billion (iv) Debt service requirement: $ billion < Prev 5 of 5 Next W tv N FEB 877 9.
Suppose that in 2011, Mexico's total government outlays were 657 billion pesos and total government revenue was 550 billion pesos. Calculate Mexico's budget surplus or deficit. Be sure to include a negative sign if appropriate. billion pesos Select the answer that best describes the impact that the surplus or deficit you calculated will have on Mexico's debt. Mexico's debt will rise by an amount equal to the size of the deficit O Mexico's debt will not change. OMexico's debt will fall by an amount equal to the size of the surplus
Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion in year 2, a budget surplus of $20 billion in year 3, and a budget deficit of $2 billion in year 4. Instructions: In part a, enter your answer as a whole number. For the absolute size of the public debt, enter your answer as a positive number. In part b, round your answer to 2 decimal places. a. What is the absolute size of its public debt in year 4? billion b. If its real GDP in year 4 is $104 billion, what is this country's public debt as a percentage of real GDP in year 4? percent
Suppose that the existing stock of debt in Outland is $500500 billion, and the government expects to collect $184184 billion as net tax revenues. If the interest rate in this economy is 11 percent and the government wants to decrease its existing stock of debt by $4040 billion this year, then what should the government run this year?
If you voted for your committees to increase overall spending under your jurisdiction, resulting in a budget deficit for the overall federal budget, what would you expect to see happen to the national debt?
Year Government Purchases Government Taxes Real GDP 1 400 247 5,812 2 434 203 5,898 Suppose there is no public debt before Year 1 and that net transfers are equal to zero. What is the public debt as a percentage of GDP in Year 2? Answer this as a percentage and round your answer to two digits after the decimal without the percentage sign. ex. If you found the rate to be 5.125%, answer 5.13.
Federal government expenditures and receipts for the simple economy of the nation of Topanga are listed in the table below. The government of Topanga would like to reduce the debt-to-GDP ratio, and the Finance Minister of Topanga has proposed the following: "The best way to reduce the debt-to-GOP ratio is to increase GDP, because with a larger GDP, the ratio will have to get smaller, 1 therefore propose that goverment expenditures be increased by 25 percent, personal income taxes be reduced by 25 percent, corporate income taxes be reduced by 25 percent, and contributions for social insurance be reduced by 25 percent. All of these moves will increase GDP by 10 percent by increasing consumer spending, business spending, and government spending by the exact amounts of the increased spending and reduced taxes. Debt GOP Goverment expenditures Goverment transfer payments Interest payment Personal income tax receipts Corporate income tax receipts Contributions for social insurance $20 million…
Suppose the media report that the federal deficit this year is $200 billion. The national debt was $5,000 billion last year, and it is $5,200 billion this year. The price level this year is 3 percent higher than it was last year. What is the real deficit?
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Suppose that the government of Smallville spends $2 trillion in 2020 and receives tax revenues of $1.5 trillion in that same year. Which of the following is TRUE? Smallville has a trade surplus of $0.5 trillion. Smallville has a trade deficit of $0.5 trillion. Smallville has a budget surplus of $0.5 trillion. Smallville has a budget deficit of $0.5 trillion. t
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