Choose the right answer: M1 = 2000 MD= 2100 – 4000r + (G – T) I= 300 – 3000r C= 200 + .9Yd T= 100 G= 160 [G-T is the government deficit, or fiscal deficit] X= 130 M= 150 1. The government deficit, or fiscal deficit, is... a) 0 b) 60 c) 100 2. The equilibrium interest rate, r, is... а) .05 b) .04 c) .025 3. The equilibrium Investment, I, is. a) 150 b) 200 c) 180 4. The equilibrium GDP, Y, is. a) 4300 b) 4400 c) 4000 5. Breakeven Consumption, C, is. a) 4070 b) 3710 c) 3980 6. Breakeven Personal Savings, A, is. a) 230 b) 220 c) 190 NOW SUPPOSE that the President and Congress decide to use fiscal policy to stimulate the economy and increase government spending, G, to 200. 7. The new fiscal deficit is. a) 0 b) 60 c) 100
Choose the right answer: M1 = 2000 MD= 2100 – 4000r + (G – T) I= 300 – 3000r C= 200 + .9Yd T= 100 G= 160 [G-T is the government deficit, or fiscal deficit] X= 130 M= 150 1. The government deficit, or fiscal deficit, is... a) 0 b) 60 c) 100 2. The equilibrium interest rate, r, is... а) .05 b) .04 c) .025 3. The equilibrium Investment, I, is. a) 150 b) 200 c) 180 4. The equilibrium GDP, Y, is. a) 4300 b) 4400 c) 4000 5. Breakeven Consumption, C, is. a) 4070 b) 3710 c) 3980 6. Breakeven Personal Savings, A, is. a) 230 b) 220 c) 190 NOW SUPPOSE that the President and Congress decide to use fiscal policy to stimulate the economy and increase government spending, G, to 200. 7. The new fiscal deficit is. a) 0 b) 60 c) 100
Chapter13: Federal Deficits, Surpluses, And The National Debt
Section: Chapter Questions
Problem 13SQ
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