Econ Macro (book Only)
6th Edition
ISBN: 9781337408745
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 6P
To determine
Level of net public debt relative to U.S. GDP and Comparison of United States measure with that of other major economies.
Concept Introduction: Public debt is the amount of debt owed by a sovereign government to its creditors. When a country wants to raise money, the primary resource available is for the country to issue debt securities to the public. Public debt securities are items such as Treasury notes, Treasury bills and long-term Treasury bonds. Public debt securities issued by the government can be held by domestic or foreign interests, and the government has an obligation to repay the debt securities when they mature.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
How do you calaculate the debt to GDP ratio?
What is fiscal policy and why it’s important?
What is the primary component(s) of GDP that Fiscal Policy is trying to effect?
Knowledge Booster
Similar questions
- the new equilibrium level of real GDP if government spending increases by $150? 18. What is the new equilibrium level of real GDP if government spending and taxes both increase by $150? 19. Make a graph showing the spending and tax revenue of your state government for as many years as you can find (use the government of your home country if you are not from the United States). What trends do you notice? What spending categories make up the largest share of the state budget? What are the largest sources of revenue?arrow_forwardWhat are the Reason that affect the increasing purchase of goods and services in the government of country?arrow_forwardThis is from a practice worksheet. Please help mearrow_forward
- The following table contains approximate figures for gross domestic product (GDP) and the national debt in the United States for June 2007 and June 2020. The national debt represents the total amount of money owed by the federal government to holders of U.S. securities. All numbers are in trillions of dollars. June 2007 June 2020 GDP (Trillions of (Trillions of Dollars) Dollars) 13.7 Total National Debt 20.89 8.9 20.9 Source: "U.S. Treasury, Bureau of Economic Analysis." Debt Held by Federal Government and Federal Reserve (Trillions of Dollars) 4.7 9 Debt Held Outside Fed. Govt. and Fed. Reserve Foreign Ownership (External U.S. Ownership (External National Debt) National Debt) (Trillions of Dollars) (Trillions of Dollars) 2.2 6.3 2.0 5.6arrow_forwardWho is in charge of the fiscal policy?arrow_forwardEconomists at which of the following government offices help formulate spending plans and regulatory policies?arrow_forward
- What is fiscal policy and what government entities make it?arrow_forwardUse the table to answer the following questions: Public Debt over Time United States France Italy Belgium Australia France Belgium Australia the United States 2001 Debt $3.3 trillion $0.9 trillion $1.5 trillion $0.3 trillion $0.2 trillion According to the table, which country appeared to be in the worst fiscal shape in 2012? Italy GDP $10.2 trillion $1.5 trillion $1.2 trillion $0.3 trillion $0.7 trillion 2011 Debt $12.2 trillion $1.8 trillion $1.7 trillion $0.3 trillion $0.4 trillion GDP $15.0 trillion $2.0 trillion $1.6 trillion $0.4 trillion $1.4 trillionarrow_forwardWhich of the following best describes a fiscal policy tool? 1. Government spending II. Government taxes III. Interest rates. IV. Bank lending V. Financial capital markets I and II I and VI III, IV, and Varrow_forward
- The use of government spending and taxation to affect aggregate demand are examples of fiscal policy. Explain how fiscal policy influences the economic growth of a country?arrow_forwardWhat are the positive and negative impacts of fiscal policy on businesses within an economy?arrow_forward2. Calculating the debt to GDP ratio Suppose the following statistics characterize the financial health of the hypothetical economy Splurgium at the end of 2017: • Gross domestic product (GDP) is equal to $150 billion. • The national debt is equal to $225 billion. • The government has a budget deficit of $9 billion. • The debt ceiling in Splurgium is set at $248 billion. The following calculations help you see how the ratio of debt to GDP changes from one year to the next. Complete the first row of the following table by computing the ratio of national debt to GDP. Suppose that nominal GDP remains at $150 billion in 2018, and again the government runs a budget deficit of $9 billion. For simplicity, assume the interest rate on the national debt is 0%, and no payments are being made to reduce the debt.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning