Consider the following economy. Government Debt, end of 2026: 400 Nominal interest rate on government debt: 2.0% 2027 inflation rate: 5% 2027 nominal GDP: 1000 Tax rate: 25% 2027 Government Expenditures: 368 2027 Net Government Transfers: 248 What is the government's debt at the end of 2027? (Round to one decimal place and do not enter the $ sign. If your answer is $6.14, enter 6.1. If your answer is $6.15, enter 6.2. If appropriate, remember to enter the - sign.)
Consider the following economy. Government Debt, end of 2026: 400 Nominal interest rate on government debt: 2.0% 2027 inflation rate: 5% 2027 nominal GDP: 1000 Tax rate: 25% 2027 Government Expenditures: 368 2027 Net Government Transfers: 248 What is the government's debt at the end of 2027? (Round to one decimal place and do not enter the $ sign. If your answer is $6.14, enter 6.1. If your answer is $6.15, enter 6.2. If appropriate, remember to enter the - sign.)
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 1SQ
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Consider the following economy.
Government Debt, end of 2026: 400
Nominal interest rate on government debt: 2.0%
2027 inflation rate: 5%
2027 nominal GDP : 1000
Tax rate: 25%
2027 Government Expenditures: 368
2027 Net Government Transfers: 248
What is the government's debt at the end of 2027?
(Round to one decimal place and do not enter the $ sign. If your answer is $6.14, enter 6.1. If your answer
is $6.15, enter 6.2. If appropriate, remember to enter the - sign.)
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