Answered: The government begins year 1 with $25…

The government begins year 1 with $25 billion of debt. Based on the information in the above table, what is the amount of debt following year 5?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Would you predict that government expenditures would be higher or lower if taxes (or user charges)…

A: The government expenditure is made out of the government revenue an when the increase in government…

Q: In the beginning of the year, the economy has public debt (or national debt) of $500 million. This…

A: Budget refers to the official government document that details the government's income and expenses.…

Q: The U.S. debt is $28.9 trillion as of Nov. 6, 2021. and each citizen's share of this debt is over…

A: "The U.S. debt is $28.9 trillion as of Nov. 6, 2021. and each citizen's share of this debt is over…

Q: Find a fiscal deficit if the primary deficit is 780 and the interest payment are 630!

A: Primary deficit The primary deficit can be defined as difference among the current year's fiscal…

Q: A country has a rate of growth (g) of 0.75 %, a debt-to-income of 94% and a primary deficit of 0.9%…

A: The percentage change within the value of all products and services produced in a very country over…

Q: a. You lower your price, and at the same time, many of the local rivers are closed to fishing due to…

A: a)in first case the demand would drop down considerably as river are down so people will not be…

Q: At the end of 2019, a country's national debt was $ 200 billion. In 2020, the government spent $…

A: Budget refers to the official government document that details the government's income and expenses.…

Q: What would be the value of interest payments if primary deficit is $27,000 million and the fiscal…

A: The data presented in the question is as follows:- Primary deficit = $27,000 million Fiscal deficit…

Q: ss domestic product (GDP) is equal to $150 billion. national debt is equal to $225 billion.…

A: GDP is the standard proportion of the worth added made through the development of labor and products…

Q: Match the terms with their definition. Budget surplus Budget deficit Balanced budget Government…

A: Surplus: The term surplus refers to the amount that has been left after meeting the requirement is…

Q: Critics of “new accounting” for federal borrowing argue that it does not matter what the government…

A: Federal borrowing alludes to a term that is utilized to depict a circumstance where the public…

Q: Year 1 2 Government Purchases 304 459 Government Real GDP 5,131 5,405 Taxes 257 263 Suppose there is…

A: The government purchase, taxes and the real GDP table is provided below. YearGovernment…

Q: Question 27: Suppose that the primary deficit (G – T) is zero in the economy. Suppose further that…

A: The primary deficit refer to difference between fiscal deficit of current year and interest payments…

Q: As per the government budget, the interest payments are estimated at $10,000 which is 40% of the…

A: The information being given is:- Interest payment = 10,000 This is the 40% value of primary deficit…

Q: In 2050, the government has collected $10,227 billion in revenues from taxes but has spent $10,584…

A: A budget deficit occurs when government spending is greater than government tax collection i.e.,…

Q: Give typing answer with explanation and conclusion Name two important ways that government debt is…

A: Government debt, also known as public debt, is the amount of money that a government owes to its…

Q: A government finances all of its debt through 1-year treasury bonds. This government is able to…

A: The debt-to-GDP ratio is the percentage of a country's debt to its GDP. It is used to measure a…

Q: government starts off with a total debt of $4.0 billion. In year one, the government runs a deficit…

A: Government debt at the end of year 3 would be given as the sum of all three years of deficit or…

Q: Why health and education is important for the development of a country

A: Health and Education play the utmost important role in the development of a country. Health is…

Q: True or false and explain: The national debt represents a threat of bankruptcy.

A: No. Country cannot become bankruptcy. Generally country can exist longer time period, if it is…

Q: The U.S. National Commission on Fiscal Policy and Reform has recommended changes to government…

A: ***Since the student has posted multiple questions, the expert is required to solve only the first…

Q: Establish and explain the Debt-GDP ratio

A: The debt - to - GDP ratio is the metric contrasting the public debt of a country with that of its…

Q: Based on the table and graph, explain how the country's rate of GPD growth has compared to its debt…

A: GDP is defined as the value of the final goods and services produced within the national boundaries…

Q: What is the General Public Debt situation in Ghana ?

A: "Debt is the amount borrowers owe to the lenders." "Public debt or national debt is the amount of…

Q: Calculate the value of fiscal deficit if primary deficit is $2000 million and interest payments is…

A: The given information is as follows:- Primary deficit = $2000 million Interest payments = $300…

Q: In 2005, the country of Boonton had $5000 in federal debt. In 2006 it ran a deficit of $2500,…

A: The federal debt is the amount of debt borrowed by federal government, to overcome and fulfill the…

Q: Assume that the total federal debt is equal to $3 trillion. Suppose now that the government runs a…

A: A budget deficit is a negative balance of budget that occurs when the government expenditures…

Q: The following describes some key variables regarding public debt in the UK. Debt to output is 95%,…

A: The debt-to-output ratio of a nation analyzes what percentage of its GDP the overall debt equates…

Q: Explain how changes in income affect consumption and saving. Give Examples. Discuss the size,…

A: When income increases, people tend to consume more and save more. This is because they have more…

Q: A political candidate has written an op-ed piece in which she claims that the U.S. government debt…

A: Given, The U.S government debt has continually grown and is out of control. The government cannot…

Q: the beginning of the year, the economy has public debt (or national debt) of $470 million. This…

A: Public saving = tax revenue - government outlay Since, government outlays are the expenditure made…

Q: Why most central banks no longer buy public debt in the primary market?

A: Primary market is the place where in securities are being created. In this market the firms sell new…

Q: still make all interest payments? r

A: *Answer: The debt-to-GDP ratio is the percentage of a country's debt to its GDP. It is used to…

Q: Suppose that in 2016 the federal government spent $730 billion and collected $480 billion in taxes…

A: government debt is the amount , which is pay by government to his borrower , here we calculate the…

Q: Define government budget in not more than 3 lines

A: As to run a family, households have proper budgets for their expenses and income similarly to run…

Q: Examples of a long term debt cycle

A: Bonds would be example of long term debt cycle.Bonds are sold and bought and it takes time for bond…

Q: Question 7: Suppose that the primary deficit (G-T) is zero in the economy. Suppose further that the…

A: We will answer the first question since the exact one was not specified. Please submit a new…

Q: At the beginning of 2009, a government had a total debt of $540 billion dollars. It ended 2009 with…

A: A budget surplus happens when pay surpasses uses. The term frequently alludes to an administration's…

Q: angladesh has debt to GDP ratio 38.86 percent during 2020.During 2021 the budget components are…

A: The debt-to-GDP ratio is a financial metric that measures the proportion of a country's total debt…

Q: A government has 15 trillion in debt (B). The real interest rate (r) is 6% . If the government…

A: The correct answer is given in the second step.

Q: Government spending $515 Tax revenues Year 1 $400 Year 2 Year 3 459 442 529 482 Refer to the above…

A: National Public debt is the burden on government if the expenditure exceed the revenue , so they…

Q: Government Purchases Government Taxes Real GDP 1 340 268 5,926 2 419 226 5,792 Suppose there is no…

A: Public debt, also known as government debt or national debt, refers to the total amount of money…

Q: True/False # Government budget is a statement of actual receipts and payments of the government for…

A: A government budget is a report ready by the government or potentially other political element…

Q: What is the relationship between budget deficit and debt ratio to Gross Domestic Product (GDP)

A: A budget deficit shown when expenses exceed revenue and indicate financial condition of a country.…

Question

Year
1
2
3
4
5
Government
tax revenues
(billions of
dollars)
240
250
260
300
325
The government begins year 1 with $25 billion of debt. Based on the information in
the above table, what is the amount of debt following year 5?
1) $20 billion (net saving rather than debt.)
2) $35 billion
Government
expenditures
(billions of
dollars)
240
245
255
320
340
3) $50 billion
O4) $325 billion

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Debt:

VIEW

Step 2: Explain the answer:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

In year one government taxes are 590,000 and government spending is 600,000 in year two government taxes are 590,000 and government spending is 590,000 in year three government taxes are 630,000 and government spending is 600,000. What is the government deficit for year two and provide the size of the government debt or surplus at the end of all three year.
Economics Over the past decade, holiday gift cards have become increasingly popular at online retailers. Not long ago, online shoppers had to really hunt at most e-retailer' sites to purchase a gift card, but today it is easier to purchase gift cards online than at traditional retail outlets. Provide a comprehensive initial post answering the following questions: Do you think online gift cards are merely a fad? Explain carefully.
A government fınances all of its debt through 1-year treasury bonds. This government is able to collect $175 million in tax revenue and the country has a GDP of $765 million. If this government is able to consistently sell treasury bonds which yield 3.29% interest, what is the maximum debt-to- GDP ratio this country could maintain and still make all interest payments? Put your answer in percentage form (e.g. 30.57 not 0.3057) and then round to two decimal places.
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 ?
Using the figures provided in Table 2, calculate the national debt as a percentage of GDP for 2008. 10.14% 59.86% 68.48% $28,333 $47,333 Table 2: Macroeconomic Summary 2008 2009 GROSS DOMESTIC PRODUCT $14,200,000,000,000 $13,800,000,000,000 EMPLOYED BUDGET SURPLUS/DEFICIT NATIONAL DEBT POPULATION POTENTIAL LABOR FORCE LABOR FORCE UNEMPLOYED $450,000,000,000 $1,400,000,000,000 $8,500,000,000,000 $9,450,000,000,000 300,000,000 305,000,000 250,000,000 255,000,000 157,000,000 154,500,000 148,000,000 140,000,000 9,000,000 14,500,000
The following describes some key variables regarding public debt in the UK. Debt to output is 95%, the growth rate of output is 1.2%, and the interest rate on debt is 1.5%. a) What is the primary surplus the government has to run as a percentage of output to ensure a stable debt to output ratio if there is no seigniorage from printing money? b) How would your answer change if you know that the increase in real money balances as a percentage of output is 0.8% per year? c) Assuming, again, no seigniorage what is the primary surplus the government needs to run to ensure that the level of government debt is constant? d) Explain briefly what the concept of "cyclically adjusted budget deficit" is and why is it relevant?
Eastlandia's GDP in 2021 is $12494. Government budget deficit in 2021 is $63.7. Government debt at the end of 2020 is $907, on which it has to pay an interest rate of 3.1 percent. Government debt at the end of 2021 is $ Do not enter $ sign. Round to two decimal places if required.
#7
Typed and correct answer please. I ll rate accordingly.
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.
What are the factors that will determine the size of some future required tax increase to pay off all debt?
How will the debt held by the public for the bottom line of $17.7 affect our economy?