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Assume a country's nominal GDP is $600 billion, government expenditures less debt service are $145 billion, and revenue is $160 billion. The nominal debt is $360 billion. Inflation is 3 percent and interest rates are 6 percent. Instructions: Enter your responses rounded to decimal place. To indicate a deficit, be sure to use a negative (-) sign before the value. a. Calculate debt service payments. $21.6 billion b. Calculate the nominal deficit or surplus. billion c. Calculate the real deficit or surplus. $11.4 6.6 billion

Assume a country's nominal GDP is $600 billion, government expenditures less debt service are $145 billion, and revenue is $160 billion. The nominal debt is $360 billion. Inflation is 3 percent and interest rates are 6 percent. Instructions: Enter your responses rounded to decimal place. To indicate a deficit, be sure to use a negative (-) sign before the value. a. Calculate debt service payments. $21.6 billion b. Calculate the nominal deficit or surplus. billion c. Calculate the real deficit or surplus. $11.4 6.6 billion

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter30: Government Budgets And Fiscal Policy
Section: Chapter Questions
Problem 51P: A government starts off with a total debt of $3.5 billion. In year one, the government runs a...
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Assume a country's nominal GDP is $600 billion, government expenditures less debt service are $145 billion, and revenue is $160 billion. The nominal debt is $360 billion. Inflation is 3 percent and interest rates are 6 percent. Instructions: Enter your responses rounded to decimal place. To indicate a deficit, be sure to use a negative (-) sign before the value. a. Calculate debt service payments. $ 21.6 billion b. Calculate the nominal deficit or surplus. $ 6.6 billion c. Calculate the real deficit or surplus. $ -11.4 billion
Transcribed Image Text:Assume a country's nominal GDP is $600 billion, government expenditures less debt service are $145 billion, and revenue is $160 billion. The nominal debt is $360 billion. Inflation is 3 percent and interest rates are 6 percent. Instructions: Enter your responses rounded to decimal place. To indicate a deficit, be sure to use a negative (-) sign before the value. a. Calculate debt service payments. $ 21.6 billion b. Calculate the nominal deficit or surplus. $ 6.6 billion c. Calculate the real deficit or surplus. $ -11.4 billion
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