Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 15, Problem 3AP
a
To determine
To write: The equation for change in debt-
b)
To determine
Equation for change in debt-GDP ratio.
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In the context of fiscal policy and its impact on national debt, consider a government that decides to implement an expansionary fiscal policy during a period of high national debt. What is the most likely immediate impact of this policy on the country's debt-to-GDP ratio, assuming all other factors remain constant? A) The debt-to-GDP ratio will decrease due to increased economic growth. B) The debt-to-GDP ratio will increase as government spending adds to the debt. C) The debt-to-GDP ratio will remain unchanged as fiscal policy does not affect national debt. D) The debt-to-GDP ratio will first decrease then increase due to delayed inflationary effects. Don't use chatgpt please provide valuable answer
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.
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