Which of the following is true? a.The size of the national debt currently is about the same size as it was during World War II. b.The national debt increases in size whenever the federal government has a surplus budget. c.The national debt's size decreased steadily after 1980. d.The current U.S. national debt is over $12.0 trillion.

Answered: Which of the following is true? a.…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following is true?

	a.	The size of the national debt currently is about the same size as it was during World War II.
	b.	The national debt increases in size whenever the federal government has a surplus budget.
	c.	The national debt's size decreased steadily after 1980.
	d.	The current U.S. national debt is over $12.0 trillion.

Expert Solution

Step 1

a. The debt to ratio hits its all-time record of 113% by the end of the war ended. In 1946, the debt was $241.86 billion whereas in present it is $2.87 trillion of income dollars. Still, the debt shrank in significance as the US economy grows. It would take the debt to GDP ratio until 1962 just to go back where the US was before the war. And with some starts and fits, the debt load decreased until hitting its low at 24% when the outstanding helf doubt by the public esd $343.7 billion. So, at present, the national debt of a nation is 26.70 trillion. This implies that the first statement is false as the size of the national debt is not the same as it was in World War-II.

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