None The national debt increased by nearly $2 trillion in the 1980s because of all the following exceptMultiple Choicetax cuts.recessionsОdefense spending.college financing.D

Option a) tax cuts: This option is incorrect because one of the main causes of the growing national…

Answered: The national debt increased by nearly…

Fundamentals of Financial Management (MindTap Course List)

14th Edition

ISBN:9781285867977

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter6: Interest Rates

Section: Chapter Questions

Problem 7Q

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If the actual budget deficit solve this general accounting question
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Suppose a government has no debt and a balanced budget. Suddenly it decides to spend $4 trillion while raising only $3 trillion worth of taxes. (a) What will be the government's deficit? (b) If the government finances the deficit by issuing bonds, what amount of bonds will it issue? (c) At a 4 percent rate of interest, how much interest will the government pay each year? (d) Add the interest payment to the government's $4 trillion expenditures for the next year, and assume that tax revenues remain at $3 trillion. In the second year, compute: (i) the deficit; (ii) the amount of new debt (bonds) issued to finance the deficit in the second year; (iii) the total debt at the end of the second year; and (iv) the debt service requirement. Express all money figures in billions of dollars.
The federal budget deficit has been growing over the past several years. What impact will this fiscal change have on the supply of Treasury bonds? A. Bond supply does not change B. Bond supply increases C. Bond supply declines
The total in rate sensitive assets for a financial institution is $120 million and the total in rate sensitive liabilities is $95 million. What is the cumulative pricing gap (CGAP) and what is the interest rate sensitivity gap ratio if total assets equals $195 million? What would the projected change to net income be if interest rates rose by 2% on both assets and liabilities? What would the projected change to net income be if interest rates declined by 2% on both assets and liabilities? What would the projected change to net income be if interest rates rose by 1.8% on assets and 1.5% on liabilities? What would the projected change to net income be if interest rates declined by 1.8% on assets and 1.5% on liabilities?
At the end of 2020 and the beginning of 2021, coupon rates on long-term T-notes and T-bonds were near historic lows. Further, the federal government was running a historically large budget deficit in an effort to stimulate an economy battered by COVID-19 and to support millions of unemployed workers. Some investment advisers warned that this could be a particularly bad time to invest in government bonds or bonds in general. Why?
Financial Accounting
Suppose Bank A has $35 million in rate-sensitive assets, $70 million in fixed rate assets, $70 million in rate sensitive liabilities, and $35 million in fixed rate liabilities and equity capital. What is the value of Bank A’s GAP?
In December 2017, President Trump signed the Tax Cuts and Jobs Act. The Act cut the corporate profits tax rate from 35 percent to 21 percent beginning in 2018, the lowest since 1939. This decrease in the corporate profits tax is supposed to shift the demand for loanable funds curve to the left. a. True b. False
2
If the Fed sold $6 billion in government securities and the public deposited $3billion in their bank account, by how much would the monetary base change?

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The national debt increased by nearly $2 trillion in the 1980s because of all the following except Multiple Choice tax cuts. recessions О defense spending. college financing. D