Experiences budget deficit

Assignment Help Business Economics

Reference no: EM131112555

Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion in year 2, a budget surplus of $10 billion in year 3, and a budget deficit of $2 billion in year 4. What is the absolute size of its public debt in year 4? If its real GDP in year 4 is $104 billion, what is this country’s public debt as a percentage of real GDP in year 4?

Reference no: EM131112555

Questions Cloud

What is the bank instability problem : What is the bank instability problem? Understand the Bryant and Diamond models of bank runs. I want you to understand the quantitative logic of the problem. Memorizing formulas is not the point here. Be able to understand how my decision about whethe..

In order to correct the balance of payments : Suppose many factories that once made goods in the United States moved to Mexico. In order to correct the balance of payments in the United States, net exports (NX) must:

Government eliminates all environmental regulations : Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is much more pollution. In this scenario, what would happen to real gdp and why

What is the firm fixed cost : A firm’s Total Cost as a function of output Quantity is described by TC(Q) = 2Q3-8Q2 + 12Q + 4. What is the firm’s Fixed Cost? (exactly). At what Quantity is Average Variable Cost = Marginal Cost? (exactly)

Experiences budget deficit : Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion in year 2, a budget surplus of $10 billion in year 3, and a budget deficit of $2 billion in year 4. What is the absolute size of its public debt in ye..

Suppose the federal budget deficit for the year : Suppose the federal budget deficit for the year was $100 billion and the economy was in a recession. If the economy had been at potential GDP, it is estimated that tax revenues would have been $60 billion higher and government spending on transfer pa..

Overproduction and over consumption of cigarettes : Recent Research indicates the second hand smoke from cigarettes endangers the health of those who are in sustained contact with smokers. Explain why the Market, operating on its own, will lead to an overproduction and over consumption of cigarettes.

Use the neoclassical model of investment : Use the neoclassical model of investment to explain the impact of each of the following on the rental price of capital, the cost of capital, and investment.

Economy successfully reaches full employment : Which policy in the box below would be one that a Keynesian economist might suggest to the government in order to help the economy reach full employment? Show the effects in the graph below if the economy successfully reaches full employment.

User Account

All Pages