Suppose the government wants to spend $696 billion on goods and services and make $461 billion in transfers this year. If the government has $7,434 billion in debt at the beginning of the year and raises $963 billion in taxes, how much will government debt rise or fall? Assume that the nominal interest rate is 2.55 percent and that the money supply does not change. Report your answer in billions of dollars to 2 decimal places.

Suppose the government wants to spend $696 billion on goods and services and make $461 billion in transfers this year. If the government has $7,434 billion in debt at the beginning of the year and raises $963 billion in taxes, how much will government debt rise or fall? Assume that the nominal interest rate is 2.55 percent and that the money supply does not change. Report your answer in billions of dollars to 2 decimal places.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 11E

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