Proponents of balanced budget argue

Assignment Help Business Economics

Reference no: EM131160356

Proponents of a balanced budget argue that the government's budget deficit cannot grow forever, but critics believe that this is not necessarily the case. They argue that what matters is the size of the debt relative to the nation's income.

For example, suppose that real output in the United States grows at approximately 3%. If the inflation rate is 2% per year, this means that nominal income must be growing at a rate of ?% per year. Because nominal income grows over time, the nation's ability to pay back the national debt also rises. Therefore, as long as the nation's income grows FASTER OR SLOWER? than the government debt, the level of debt can continue to increase without collapsing the economy. In this case, the nominal government debt can rise by ? % each year without increasing the debt-to-income ratio.

Reference no: EM131160356

Questions Cloud

Develop a conceptual model by outlining : Write a consultancy report about your study considering all of the steps listed below in the given order - The two arrival processes and the service delays have to be modelled stochastically. The model has to provide graphical output for at least o..

Which platform has a higher market share : Which platform has a higher market share? What are the common security concerns for both platforms? Which platform would you suggest implementing and why?

Important information was recovered : Find an article where important information was recovered from the recycle bin or the INFO2 folder, summarize the article in your own words, and discuss why an investigator should care about this information. Include the link to the article.

Benefits and risks of using wireshark : What is learned about using Wireshark? and Network sniffing? What are the benefits and risks of using Wireshark?

Proponents of balanced budget argue : Proponents of a balanced budget argue that the government's budget deficit cannot grow forever, but critics believe that this is not necessarily the case. They argue that what matters is the size of the debt relative to the nation's income.

Programming looping structures : Looping structures are key design structures used in programming languages. The ability to repeat code is a powerful tool and can save many lines of code; however, if a loop is not properly designed it can run to infinity thereby draining a system..

Determine the equilibrium conversion for the elementary : What restrictions should be placed on the reactor operating isothermally if we are toobtain a conversion of 75% or higher

Find two additional academic sources to support perspectives : Analyze this character based on the theory you have chosen. Use at least three concepts from the theory to provide some plausible explanations for this character's life course and history. In addition to your textbook, research and find two additi..

Judicial requirement for an affirmative action plan : Which of the following is a judicial requirement for an affirmative action plan? If a case is filed with the Equal Opportunity Employment Commission (EEOC), the parties may be involved in a

User Account

All Pages