What fraction of gdp would go toward paying interest on debt

Assignment Help Macroeconomics

Reference no: EM131834610

Question: a. If the debt-to-GDP ratio rose to 100% and the interest rate on the debt were 5% per year, what fraction of GDP would go toward paying interest on the debt?

b. If this happened, would interest on the debt be a bigger share of GDP than Social Security is today?

c. In your opinion, do you think that Americans would tolerate spending this much of the national income on interest payments for past spending? More important, do you think Americans would want their politicians to stop making the interest payments and just default on some or all of the federal debt? Why or why not?

Reference no: EM131834610

Questions Cloud

System with impulse response : Is a system with impulse response g(t) = 1/(t + 1) BIBO stable? How about g(t) = te-t for t = 0?

Time-invariant state equation realization : Find a realization of g(t, t) = sin t(e-(t - t)) cos t. Is it possible to find a time-invariant state equation realization?

Review problem on government transfer programs : Today, many government transfer programs are run through the tax code. The Earned Income Tax Credit (EITC), which we discussed in this chapter.

Plant with transfer function : Given a plant with transfer function (s) = (s - 1)/(s2 - 4), find a compensator in the unity-feedback configuration so that the overall system has desired poles

What fraction of gdp would go toward paying interest on debt : If the debt-to-GDP ratio rose to 100% and the interest rate on the debt were 5% per year, what fraction of GDP would go toward paying interest on the debt? b.

Find the companion-form and modal-form equivalent : Find an equivalent state equation of the equation in Problem 4.4 so that all state variables have their largest magnitudes roughly equal to the largest

What is the bonds expected return : A C-rated bond is selling at par on 18 July 2007. The bond's maturity is 17 July 2017, it has a coupon of 11% and it has a recovery percentage of 67%.

Explain the main pathogens in processed meats : Explain the main pathogens in processed meats. The three main bacterial pathogens in seafood and nematode contamination.

Explain the rapid growth of medical spending : Recall that health care is a field of rapid innovation. How can your answer to parts b and c explain the rapid growth of medical spending?

User Account

All Pages