Suppose a government has no debt and a balanced budget. Suddenly it decides to spend $10 billion while raising only $8 billion worth of taxes. a) What will be the government's deficit? b) If the government finances the deficit by issuing bonds, what amount of bonds will it issue? c) At a 10 percent rate of interest, how much interest will the government pay each year?

Q: 1)Which of the following best characterizes what a recessionary environment requires of a government…

A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If…

Q: f social security payments to retirees increase, AD will increase and raise Y*

A: Social Security Benefits(SSB) are the benefits which provide some replacement income for disabled…

Q: Define saving and investment. Data for the simple economy of Newt show that in 2011, saving exceeded…

A: Balanced budget refers to a situation when total expenditure is equal to total revenue. Budget…

Q: If the objective of fiscal policy is to stabilize (achieve full-employment (potential) GDP and…

A: A balanced budget is a circumstance in monetary planning or the budgeting technique where total…

Q: 70 460 480 500 520 540 560 580 600 Real GDP a. If potential GDP (LAS) IS $580, and the economy is…

A: Recessionary gap exits when the aggregate expenditure is less than the real output at full…

Q: In what ways do future generations benefit from this generation’s deficit spending?  Cite three…

A: Public deficit: It refers to the situation in which government expenditure exceeds its revenue…

Q: budgetary deficit is 20 billion and borrowings and other liabilities are 30 billion what is the…

A: A fiscal deficit is a gap between government income and expenditure, fiscal deficits occur when the…

Q: I'm studying for an exam and this question is honestly going right over my head. I would love a bit…

A: Prior to Covid-19 and resulting financial crisis the US government was already in deficit spending…

Q: 1. When the federal government spends more than it takes in via taxes, it runs a fiscal deficit. A…

A: A budget basically refers to a financial plan that covers a certain time period, generally a year.It…

Q: Suppose a government has no debt and a balanced budget. Suddenly it decides to spend $10 billion…

A: Given  That government has no debt and a balanced budget but suddenly it decides to spend $10…

Q: Refer to the following table for Waxwania: Government Expenditures, G Tax Revenues, T Real GDP $180…

A: (a) Country is presently delivering $550 of real GDP.  Now, the tax revenue is $110 and government…

Q: Consider the U.S.’s government deficit. Recently (perhaps excluding 2020 and government spending in…

A: Generally a government deficit can be defined as the shortfall in government's income compared with…

Q: Explain 2 alternative methods that you can think of to raise government finance other than borrowing…

A: Government expenditure is the amount that the country's government spends for the development of the…

Q: Next question The table shows the tax revenues and the outlays of a nation at each level of real…

A: please find the answer below.

Q: 100 80 60 40 20 O $100 200 300 400 500 600 700 800 900 GDP Refer to the diagram, in which Tis tax…

A: When spending surpass receipts, a budget deficit occurs, and it indicates a country's financial…

Q: If Tax revenue is greater than government spending, which of the following must be true? Select ALL…

A: The difference between the government spending and tax revenue is referred as budget.

Q: In 2019, the U.S. government’s total debt reached $21.2 trillion, approximately equal to 105.3% of…

A: When the government incurs a debt of $600 billion in 2020, the total debt (TD) rises by the sum of…

Q: Which fiscal policy would make a budget surplus smaller or a budget deficit larger? lower government…

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: What is a budget deficit? How does a government respond to a budget deficit?

A: A government budget is an annual financial statement prepared by the governments that outlines the…

Q: Which of the following are consistent with Expansionary Fiscal Policy Surplus Increase Government…

A: Fiscal policy is the use of government spending and tax policy to influence the path of the economy…

Q: The following table shows government spending and tax revenue for a hypothetical economy over a…

A: A budget deficit occurs when the actual expenses of the government exceeds the planned expenses.

Q: Suppose that a family's income is exactly the same as the poverty threshold. This family's income…

A: In social science, financial gain difference refers to a substantial gap in financial gain…

Q: Suppose that in 2005 the government collected $240 billion in tax revenue and spent $270 billion,…

A: The budget is said to be balanced when the tax revenue is equal to the government spending. A budget…

Q: Some of the components of the state budget depend on the level of output Y. The following components…

A: Given: Tt=1000+0.1Yt TRt=800-0.05Yt Gt=1800 IP=100

Q: ist the 3 major economic goals of fiscal policy.   Who is responsible for fiscal policy?

A: Since you have multiple questions, I would be answering the first two. If you want any specific…

Q: Suppose that the Office of Management and Budget provides the accompanying estimates of federal…

A: Deficit as percentage of GDP = (Deficit / GDP) * 100

Q: What budget changes would have to occur in order to lower an annual deficit? Annual expenditures…

A: A government budget is a statement of its planned expenditures and revenue receipts for a given time…

Q: Refer to the accompanying table for Waxwania.   Government Expenditures, G Tax Revenues, T Real GDP…

A: Average tax rate = (Tax paid / Taxable income) => Average tax rate = (Tax revenue / Real GDP)…

Q: Public debt is the sum of deficits and surpluses (negative deficits) over time. Suppose that a…

A: Real GDP is the inflation-adjusted measure of the value of all goods and services produced in a…

Q: A. What was the average increase in debt for Nation XYZ between the years 2005 and 2015 B. What was…

A: Real Gross Domestic Product (GDP) can be defined as the inflation adjusted value of the total value…

Q: In addition to issuing bonds, explain any two major ways the government can raise revenue to finance…

A: In n economy, financing government debt is necessary to reduce the burden of future generation and…

Q: Refer to the figure below to answer the questions that follow. Surplus G Deficit GDP, GDP, GDP, Real…

A: Budget Deficit refers to the excess of government expenditure over government receipts.  Budget…

Q: discuss the budget cycle.discuss why the annual budget is considered as a political act of state?

A: Budget is a financial plan for a specified future period of time. The budget presents an estimation…

Q: Suppose that in your first year of college you spend $31,200.00 more than you earn. In your second…

A: Deficit refers to the difference between spending and earning. Deficit occurs when spending is more…

Q: In 2050, the government has collected $9,409 billion in revenues from taxes but has spent $10,985…

A: When revenue surpasses spending, there is a budget surplus. Since people have "savings" rather than…

Q: If government spending is greater than tax revenue, which of the following must be true? Select ALL…

A: Tax revenue is the earning of the government through taxes.

Q: The budget function for the economy of Sunsville is T - G = -400 + 0.25Y. a) Suppose income is…

A: Given the budget function of Sunsville: T-G=-400+0.25Y        ... (1)   When the value of T-G is…

Q: Refer to the following table for Waxwania: Government Expenditures, G Tax Revenues, T Real GDP $160…

A: The level of a budget deficit is the level that refers to the excess spending of the government as…

Q: Suppose that in 2012 the government collected $320 billion in revenue and spent $380 billion, while…

A: Additional deficit on 2012 =$320- $380= -$60 billion