Suppose that in 2011, Mexico's total government outlays were 657 billion pesos and total government revenue was550 billion pesos. Calculate Mexico's budget surplus or deficit. Be sure to include a negative sign if appropriate.billion pesosSelect 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 deficitO Mexico's debt will not change.OMexico's debt will fall by an amount equal to the size of the surplus

We are given:Total outlay/ Total expenditure of Mexican government= 657 billion pesosTotal Revenue…

Answered: Suppose that in 2011, Mexico's total…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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To eliminate the deficit (and halt the growth of the net public debt), a politician suggests that “we should tax the rich.” The politician makes a simple arithmetic calculation in which he applies a higher tax rate to the total income reported by “the rich” in a previous year. He says that the government could thereby solve the deficit problem by taxing “the rich.” What is the major fallacy in such a claim?
As long as tax rates are not very high, a decrease in tax rates will tend to a. increase the budget deficit b. decrease the budget deficit c. leave the budget deficit unchanged d. cause the budget deficit to first decrease then increase
Describe the current national debt. How much of this is foreign owned? What are the dangers of foreign owned national debt? How much is too much? Are we in danger of having too much foreign owned national debt?
Explain how a budget deficit arises and what actions governments must take in this circumstance. How does the budget deficit relate to the national debt?
Which of the following owns the largest proportion of the national debt? a. foreigners b. federal, state, and local governments and the Federal Reserve c. private individuals, banks, and corporations d. foreign governments
No. 6 Consider the following equations for this particular economy. C = 100+ 0.75Yd I = 150 G = 250 T = 200 X = 100 Q = 0.25Yd a. What is the equilibrium level of income of this economy? Is the trade balance in deficit or surplus? By how much? b. Suppose there is an increase in government expenditures by 50. What is the effect on the equilibrium level of income? What is the effect on the trade balance? Explain your answers. C. This question is independent of Question (b). Suppose exports increase by 50. Compared to you answer in (a), what is the effect on the equilibrium level of income and on the trade balance? Explain your answers.
Calculate interest payments if fiscal deficit is $77 million and primary deficit is $50 million
The imaginary country of Acordia lists the following projected revenues and outlays for 2020: $30 million in personal income tax, $20 million in corporate income tax, $7 million in indirect taxes, $2 million in investment income, $35 million in transfer payments, $14 million in government expenditures, and $4 million in debt interest. What is the projected budget surplus (or deficit) for 2021? Calculate the amount and indicate whether it is a surplus or deficit.
7. Agreement and disagreement among economists Suppose that Paolo, an economist from a research institute in Alberta, and Sharon, an economist from a public television program, are arguing over budget deficits. The following dialogue shows an excerpt from their debate: Sharon: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Paolo: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits. Sharon: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. The disagreement between these economists is most likely due to Despite their differences, with which proposition are two economists chosen at random most likely to agree? O Employers should not be restricted from outsourcing work to foreign nations. O Central banks should focus more on maintaining low…
Describe how the federal deficit is a burden on the shoulders of future generations.
3. Budget balances and the national debt The following table lists federal expenditures, revenues, and GDP for the U.S. economy during several years. All numbers are in billions of dollars. Revenues Year (Billions of dollars) 1929 3.9 1948 1967 1986 2005 FEDERAL EXPENDITURES AND RE VENUES (Percent of GDP) 25 20 15 10 41.6 Plot the data for revenues and expenditures as a percentage of GDP on the following graph, rounded to the nearest percent. Use the orange points (square symbol) for expenditures and the green points (triangle symbol) for revenues. Line segments will automatically connect the points. 1929 148.8 769.2 2,153.9 Expenditures GDP (Billions of dollars) (Billions of dollars) 3.1 103.6 1948 29.8 157.5 990.4 2,472.2 1987 YEAR 1986 269.2 2005 832.6 4,462.8 12,421.9 Expenditures Δ Revenues ?
Analyze the challenges that the US economy is facing to reduce the deficit

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