Explain the debt a burden on future generation.

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Answer 1

Question

Chapter 32, Problem 1DQ

To determine

Explain the debt a burden on future generation.

Expert Solution & Answer

Explanation of Solution

The US has the nation debt of under $1 trillion until 1980, in these most of it resulting from government deficits during recessions or wars. The wartime debt corresponded to a decrease in investment for peacetime uses, but few would regard this as a true burden. The deficits incurred during recessions probably did not constitute a burden either, because during a slack aggregate demand they did not crowd out investment and encouraged investment. Since 1980, the tax rates decrease to such an extend that even when the economy has been operating at its full employment level. However, 30% of the total national debt is owed to foreign individuals, business and government, 45% is owed to US individuals and companies. Thus, the part of the debt held by foreigners is a burden to US, as US individual have to transfer resources to make the interest payment.

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Students have asked these similar questions

2. The demand and supply functions for two interdependent goods X and Y are givenbyQDX = 7 − 4PX + 2PYQSX = −6 + 4PX − PYQDY = 1 + PX − PYQSY = −4 − PX + 2PY(a) Find the market equilibrium condition for each good. (b) Express the equilibrium conditions in the matrix form Ax = b.(c) Find the inverse of matrix A. (d) Given your result in part (c), calculate the equilibrium prices. (e) What is the equilibrium quantity for goods X and Y ?

2. A two-sector macro-economic model satisfies the following structural equations:Y = C + I∗C = aY + bwhere 0 < a < 1 and b > 0 are parameters and I∗ denotes investment.(a) What are the exogenous and endogenous variables in this model? (b) Re-arrange this system of equations to express the endogenous variables in terms of the exogenous variables and parameters. (c) Express this system of equations in the matrix form Ax = b. (d) Show that the inverse of matrix A exists.

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Answer 2

Question

Chapter 32, Problem 1DQ

To determine

Explain the debt a burden on future generation.

Expert Solution & Answer

Explanation of Solution

The US has the nation debt of under $1 trillion until 1980, in these most of it resulting from government deficits during recessions or wars. The wartime debt corresponded to a decrease in investment for peacetime uses, but few would regard this as a true burden. The deficits incurred during recessions probably did not constitute a burden either, because during a slack aggregate demand they did not crowd out investment and encouraged investment. Since 1980, the tax rates decrease to such an extend that even when the economy has been operating at its full employment level. However, 30% of the total national debt is owed to foreign individuals, business and government, 45% is owed to US individuals and companies. Thus, the part of the debt held by foreigners is a burden to US, as US individual have to transfer resources to make the interest payment.

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Answer 3

Question

Chapter 32, Problem 1DQ

To determine

Explain the debt a burden on future generation.

Expert Solution & Answer

Explanation of Solution

The US has the nation debt of under $1 trillion until 1980, in these most of it resulting from government deficits during recessions or wars. The wartime debt corresponded to a decrease in investment for peacetime uses, but few would regard this as a true burden. The deficits incurred during recessions probably did not constitute a burden either, because during a slack aggregate demand they did not crowd out investment and encouraged investment. Since 1980, the tax rates decrease to such an extend that even when the economy has been operating at its full employment level. However, 30% of the total national debt is owed to foreign individuals, business and government, 45% is owed to US individuals and companies. Thus, the part of the debt held by foreigners is a burden to US, as US individual have to transfer resources to make the interest payment.

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Answer 4

Question

Chapter 32, Problem 1DQ

To determine

Explain the debt a burden on future generation.

Expert Solution & Answer

Explanation of Solution

The US has the nation debt of under $1 trillion until 1980, in these most of it resulting from government deficits during recessions or wars. The wartime debt corresponded to a decrease in investment for peacetime uses, but few would regard this as a true burden. The deficits incurred during recessions probably did not constitute a burden either, because during a slack aggregate demand they did not crowd out investment and encouraged investment. Since 1980, the tax rates decrease to such an extend that even when the economy has been operating at its full employment level. However, 30% of the total national debt is owed to foreign individuals, business and government, 45% is owed to US individuals and companies. Thus, the part of the debt held by foreigners is a burden to US, as US individual have to transfer resources to make the interest payment.

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Answer 5

Chapter 32, Problem 1DQ

To determine

Explain the debt a burden on future generation.

Expert Solution & Answer

Explanation of Solution

The US has the nation debt of under $1 trillion until 1980, in these most of it resulting from government deficits during recessions or wars. The wartime debt corresponded to a decrease in investment for peacetime uses, but few would regard this as a true burden. The deficits incurred during recessions probably did not constitute a burden either, because during a slack aggregate demand they did not crowd out investment and encouraged investment. Since 1980, the tax rates decrease to such an extend that even when the economy has been operating at its full employment level. However, 30% of the total national debt is owed to foreign individuals, business and government, 45% is owed to US individuals and companies. Thus, the part of the debt held by foreigners is a burden to US, as US individual have to transfer resources to make the interest payment.

Answer 6

Chapter 32, Problem 1DQ

To determine

Explain the debt a burden on future generation.

Expert Solution & Answer

Explanation of Solution

The US has the nation debt of under $1 trillion until 1980, in these most of it resulting from government deficits during recessions or wars. The wartime debt corresponded to a decrease in investment for peacetime uses, but few would regard this as a true burden. The deficits incurred during recessions probably did not constitute a burden either, because during a slack aggregate demand they did not crowd out investment and encouraged investment. Since 1980, the tax rates decrease to such an extend that even when the economy has been operating at its full employment level. However, 30% of the total national debt is owed to foreign individuals, business and government, 45% is owed to US individuals and companies. Thus, the part of the debt held by foreigners is a burden to US, as US individual have to transfer resources to make the interest payment.

Answer 7

Chapter 32, Problem 1DQ

To determine

Explain the debt a burden on future generation.

Answer 8

Expert Solution & Answer

Explanation of Solution

The US has the nation debt of under $1 trillion until 1980, in these most of it resulting from government deficits during recessions or wars. The wartime debt corresponded to a decrease in investment for peacetime uses, but few would regard this as a true burden. The deficits incurred during recessions probably did not constitute a burden either, because during a slack aggregate demand they did not crowd out investment and encouraged investment. Since 1980, the tax rates decrease to such an extend that even when the economy has been operating at its full employment level. However, 30% of the total national debt is owed to foreign individuals, business and government, 45% is owed to US individuals and companies. Thus, the part of the debt held by foreigners is a burden to US, as US individual have to transfer resources to make the interest payment.