Reference no: EM131388814
Suppose the U.S. government begins this year with no debt. The expenditures listed below do not include interest on debt.
2016:
Spending on goods & services and transfers $4.5 trillion
tax receipts $4 trillion
What is the budget deficit? How much must the Treasury borrow?
2017: Expenditures and tax receipts both increase by 1% from year before. In addition, the debt incurred in 2016 has a 2% interest rate, which must be paid this year.
What is the budget deficit? How much must the Treasury borrow? What is its total debt?
2018: Spending and tax same as 2017. Bonds issued in 2017 carry same interest rate.
What is the budget deficit? How much must the Treasury borrow? What is its total debt?
2019: Spending is same as 2018. But taxes increase 10% due to major expansion in economy. Bonds issued in 2018 carry same interest rate. Half of the (cumulative) Treasury bonds mature this year.
What is the budget deficit? How much must the Treasury borrow? How much in bonds must it issue?
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: Suppose the U.S. government begins this year with no debt. The expenditures listed below do not include interest on debt. What is the budget deficit? How much must the Treasury borrow? What is the budget deficit? How much must the Treasury borrow? Wh..
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