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35) When a country has public-sector net borrowing, it means that
- A) the government has accumulated debt over a number of years.
- B) the total expenditure of central government, local government and public corporations exceeds the tax revenues and sales revenues collected by those bodies.
- C) central government's spending exceeds its tax receipts.
- D) nationalised industries are being subsidised.
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- Can you please answer question 35, please? No explanation needed. Thanks in advance. 35) When a country has public-sector net borrowing, it means that A) the government has accumulated debt over a number of years. B) the total expenditure of central government, local government and public corporations exceeds the tax revenues and sales revenues collected by those bodies. C) central government's spending exceeds its tax receipts. D) nationalised industries are being subsidisedAs a result of this policy, the equilibrium interest rate . Which of the following statements accurately describe the effect of the increase in government borrowing? Check all that apply. National saving decreases by less than $20 billion. Private saving increases by less than $20 billion. Public saving decreases by exactly $20 billion. Investment increases by less than $20 billion. The more elastic the supply of loanable funds, the is the change in national saving as a result of the increase in government borrowing. The more elastic the demand for loanable funds, the the change in national saving as a result of the increase in government borrowing. Suppose households believe that greater government borrowing today implies higher taxes to pay off the government debt in the future. This belief would cause people to save today, which would private saving and the supply of loanable funds. This would the…The current market rate of interest is 10 percent. At that rate of interest, businesses borrow $300 billion per year for investment and consumers borrow $50 billion per year to finance purchases. The government is currently borrowing $150 billion per year to cover its budget deficit.b. Assuming taxpayers do not anticipate an increase in the future market rate of interest due to the increase in budget deficit, show the impact of the increase in the budget deficit on the market for loanable funds.
- Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Ghana saved 20% of their disposable income (Yd) and spent the rest on consumption. In addition, GH¢5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GH¢8,000.00 was supposed to be financed by a lump sum tax of GH¢2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH¢2,500.00. In addition, the country’s import (M) during the previous fiscal year comprises of GH¢1,000.00 which was independent of the country’s national income and 10% which was dependent of the country’s national income. Given these data on Ghana…“Crowding out” refers to the situation in whicha. borrowing by the federal government raisesinterest rates and causes firms to invest less.b. foreigners sell their bonds and purchase U.S.goods and services.c. borrowing by the federal government causesstate and local governments to lower theirtaxes.d. increased federal taxes to balance the budgetcause interest rates to increase and consumercredit to decrease.Public saving is positive when: a. there is a government budget deficit b. after-tax income of households and businesses is greater than consumption expenditures c.there is a government budget surplus d. the government's budget is balanced
- Assuming you are the Minister of Finance and Economic Planning for Nigeria, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Nigeria’s for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Nigeria saved 20% of their disposable income (Yd) and spent the rest on consumption. In addition, ₦5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was ₦ 7,000.00. Total Government expenditure (G) which stood at ₦8,000.00 was supposed to be financed by a lump sum tax of ₦2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at ₦2,500.00. In addition, the country’s import (M) during the previous fiscal year comprises of ₦1,000.00 which was independent of the country’s national income and 10% which was dependent of the country’s national income. Given these data on…The current market rate of interest is 10 percent. At that rate of interest, businesses borrow $300 billion per year for investment and consumers borrow $50 billion per year to finance purchases. The government is currently borrowing $150 billion per year to cover its budget deficit. a. Derive the market demand for loanable funds, and show how investors and consumers will be affected if the budget deficit increases to $250 billion per year. b. Assuming taxpayers do not anticipate an increase in the future market rate of interest due to the increase in budget deficit, show the impact of the increase in the budget deficit on the market for loanable funds. c. How would your conclusion differ if taxpayers fully anticipate future tax increases to offset the increase in the budget deficit? d. Do you think the Ricardian Equivalence is realistic?Explain how the Australian Government’s ability to reduce its budget deficit is affected by the ageing population?
- A government is facing a significant budget deficit due to high levels of public spending and declining tax revenues. To address this, several measures are being considered, including cutting public expenditures, increasing taxes, and implementing more efficient tax collection methods. The impact of a budget deficit on an economy can include increased national debt and potential inflationary pressures. In this situation, the most effective approach to address the budget deficit would be:A) Borrowing more funds internationallyB) Cutting essential public servicesC) Increasing taxes and improving tax collectionD) Privatizing all public services Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.On Friday, 27 September, 2019, the Minister of Finance, Honourable Dr. Bwalya Ng’andu, MP, presented the 2020 National Budget to the National Assembly of Zambia. The theme of the budget is “Focusing national priorities towards stimulating the domestic economy”. In this budget the Minister highlighted among other things, some tax incentives and sources of revenue for the year 2020. Among the tax incentives, he proposed the suspension of import duty, for three years, on the importation of machinery for processing of solid waste to generate electricity and produce organic fertilizers as well as on selected aqua culture equipment. The Minister did not propose any changes to the Pay As You Earn (PAYE) tax which remains as follows: Annual Income (K) Tax Rate (%) First 39,600 0 39,6001 – 49,200 25 49, 201 – 74, 400 30 Above 74, 401 37.5 Briefly discuss the effect of the two tax incentives highlighted in the statement above Briefly explain the various…Assumed that the governemnt maintained a balance budget initially.However, the financial secretary underestimated the recovery of local economy and the budget surplus is resulted.How does the budget surplus affect the loanable fund market? How does this market restore the equilibrium? How is the ‘private sector spending’ affected by the ‘public sector spending’? Explain and illustrate with a well-labelled diagram.
