Based on what we observed in the module on public finance, select all true statements. O The largest decline of the real net debt for the Canadian federal government happened around 2000. Among the OECD countries, the Canadian government (all governments) is among the most indebted countries (above the median), if debt is measured by the gross debt as a percentage of GDP. O Over the 1960-2020 period, the main source of revenue for all governments shifted from income taxes to taxes on production and imports. O None of the above

Based on what we observed in the module on public finance, select all true statements. O The largest decline of the real net debt for the Canadian federal government happened around 2000. Among the OECD countries, the Canadian government (all governments) is among the most indebted countries (above the median), if debt is measured by the gross debt as a percentage of GDP. O Over the 1960-2020 period, the main source of revenue for all governments shifted from income taxes to taxes on production and imports. O None of the above

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 5DQ

See similar textbooks

Similar questions

Explain whether or not you agree with the premise of the Ricardian equivalence theory that rational people might reason: Well, a higher budget deficit (surplus) means that Im just going to owe more (less) taxes In the future to pay off all that government borrowing, so Ill start saving (spending) now. Why or why not?
Let’s assume that in 2017, Sweden’s government had no debt and held $120 billion dollars. To stimulate its economy during 2018, the government of Sweden decides to spend $65 billion more than it will receive in tax revenue and in 2019, the government of Sweden’s expenditures will exceed tax revenues by $75 billion. What will the government of Sweden’s total debt equal at the end of 2019? Group of answer choices $20 billion $120 billion $140 billion $260 billion
Suppose that in 2018 the federal government spent $3.4 trillion and collected $2.8 trillion in taxes. In 2019, government spending rose to $3.8 trillion and government revenue rose to $3.0 trillion. If the government debt was $20.0 trillion at the beginning of 2018, what will it be at the end of 2019? Select one: a. $21.4 trillion b. $20.8 trillion c. $20.6 trillion d. $19.8 trillion e. $18.6 trillion
Suppose that in 2012 the government collected $320 billion in revenue and spent $380 billion, while in 2013 the government revenue increased to $350 billion and its spending fell to $330 billion. If the government had a debt of $600 billion at the beginning of 2012, how much debt would it have by the end of 2013? Select one: a. $620 billion b. $640 billion c. $650 billion d. $660 billion e. $680 billion
Suppose at period t we denote Gt = government expenditure, Bt = government debt, i = interest rate on existing government debt, Tt = net taxes. In period t+1, government budget constraint can be written as, Group of answer choices 1.Gt + iBt = (Bt+1 - Bt) 2.Gt + iBt = Tt + (Bt+1 - Bt) 3.Gt = (Bt+1 - Bt) 4.Gt = Tt + (Bt+1 - Bt)
Refer to the accompanying table for Waxwania. Government Expenditures, G Tax Revenues, T Real GDP $190 100 $500 190 120 600 190 140 700 190 160 800 190 180 900 a. What is the marginal tax rate in Waxwania? ____percent --The average tax rate? _____percent b. Suppose Waxwania is producing $600 of real GDP, whereas the potential real GDP (or full-employment real GDP) is $700.-How large is its budget deficit? $____ -Its cyclically adjusted budget deficit? $____ -Its cyclically adjusted budget deficit as a percentage of potential real GDP?________ percent
3)Show and explain how an expansionary fiscal policy can cause crowding-out effect by using aggregateexpenditure and aggregate output curves.2)What action could the TCMB take to reduce the crowding-out effect of an expansionary fiscal policy?1)By using graphs, show and explain the effects of an expansionary fiscal policy on the goods market by taking thelink between two markets into account
Question: 1 State whether the following are true, false, or uncertain, and provide reasons for your answers. Use appropriate diagrams and/or equations, where relevant, to aid your explanations: d) An increase in a household's ability to borrow would lead to an increase in their marginal propensity to consume. e) The only way to reduce government debt in an economy is for the government to continuously run budget surpluses. f) Countries with aging populations often see decreases in their debt-to-GDP ratios, ceteris paribus. g) Increasing the degree of central bank independence over time has made it harder for them to resist short-term political pressure leading to upward pressure on inflation.
True or false? If false, explain why.a. The total public debt is more relevant to an economy than the public debt as a percentage of GDP.b. An internally held public debt is like a debt of the left hand owed to the right hand.c. The Federal Reserve and Federal government agencies hold more than three-fourths of the public debt.d. The portion of the U.S. debt held by the public (and not by government entities) was larger as a percentage of GDP in 2007 than it was in 1995.e. In recent years, Social Security payments to retirees have exceeded Social Security tax revenues from workers and their employers.
Now suppose that the gross national debt initially is equal to $2.5 trillion and the federal government then runs a deficit of $100 billion. What is the new level of gross national debt? If 100 percent of this deficit is financed by the sale of securities to the public, what happens to the level of debt held by the public? What happens to the level of gross debt? 3. If GDP increases by 6 percent in the same year as the deficit is run, what happens to the gross debt as a percentage of GDP? What happens to the level of debt held by the public as a percentage of GDP?
This problem gets at the question of whether a government can run a budget deficit forever. For a government to avoid defaulting on its debt, it has to ensure its Debt/GDP ratio doesn’t get too big. Assume that ratio is not too big in the US right now, even though it’s about 100%.a) US nominal GDP has been rising by about 4% in recent years. Assume that continues. How much can US government debt rise each year in percent and keep the Debt/GDP ratio constant? b) If US government debt equaled $23 trillion at the start of this year, how big of a budget deficit could the US government run in dollars this year and still keep its Debt/GDP ratio constant?
Given the following information. C = 100 + 0.75Yd , (dengan, Yd = Y − T) I = 240 − 600r G = 50 T = 30 Derive the equation for IS curve. Calculate the equilibrium level of income if the interest rate is 8 percent. What is the impact on the equilibrium level of income if the government runs an expansionary fiscal policy by adding G by 200 units? What is the impact on the IS curve if the government increases tax to 80 units? What are the factors other than the fiscal policy factors that can cause the IS curve to shift?