1. The following show data of a hypothetical government spending. All figures are in billions ofdollars. G stands for Government expenditure. T stands for net tax revenue, and iD stands for debtservice payments.TotalPrimaryDeficitStock ofTiDYearDeficitDebt12345201017525175201118026180201218527185201318826190201418525195201518524200201618023205201717522210a. Calculate the budget deficit in each year by completing column 4.b. Calculate the primary budget deficit by completing column 5c. Suppose the initial stock of debt in 2009 was $400 billion. What is the stock of debt by2010? Hint ( deficit in 2010 adds to the existing stock of debt)d. Calculate the stock of debt by completing column 6e. Suppose that the debt to GDP ratio was the same in 2017. By what percentage GDP grewbetween 2009 and 2017.

As it is not mentioned that which questions are to be answered, so the answer of first two subparts…

a. Calculate the budget deficit in cach ycar by completing column 4. b. Calculate the primary budget deficit by completing column 5 c. Suppose the initial stock of debt in 2009 was $400 billion. What is the stock of debt by 2010? Hint ( deficit in 2010 adds to the existing stock of debt)

a. Calculate the budget deficit in cach ycar by completing column 4. b. Calculate the primary budget deficit by completing column 5 c. Suppose the initial stock of debt in 2009 was $400 billion. What is the stock of debt by 2010? Hint ( deficit in 2010 adds to the existing stock of debt)

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter17: Federal Deficits, Surpluses, And The National Debt

Section: Chapter Questions

Problem 7SQP

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Question

1. The following show data of a hypothetical government spending. All figures are in billions of
dollars. G stands for Government expenditure. T stands for net tax revenue, and iD stands for debt
service payments.
Total
Primary
Deficit
Stock of
T
iD
Year
Deficit
Debt
1
2
3
4
5
2010
175
25
175
2011
180
26
180
2012
185
27
185
2013
188
26
190
2014
185
25
195
2015
185
24
200
2016
180
23
205
2017
175
22
210
a. Calculate the budget deficit in each year by completing column 4.
b. Calculate the primary budget deficit by completing column 5
c. Suppose the initial stock of debt in 2009 was $400 billion. What is the stock of debt by
2010? Hint ( deficit in 2010 adds to the existing stock of debt)
d. Calculate the stock of debt by completing column 6
e. Suppose that the debt to GDP ratio was the same in 2017. By what percentage GDP grew
between 2009 and 2017.

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