Budget Deficits and Surplus, Microeconomics

Assignment Help:
In year one, suppose the federal government has no national debt and spends $100 billion, while raising only $50 billion in taxes. The U.S. Treasury will issue $ billion of government bonds to finance the deficit.

b. In year two, assume tax revenues and government expenditures remain the same. If the government makes a payment on debt service at 10 percent rate of interest , this will yield a total government expenditure in the second year of $ billion.

c. Therefore in year two, the deficit will be equal to $ billion, the amount of new debt issued will be $ billion and the new national debt (year one + year two) will equal $ billion.

Related Discussions:- Budget Deficits and Surplus

Protectionism and free trade, reasons for and against free trade with forei...

reasons for and against free trade with foreign sector

Atoms and molecules, who proposed the law of chemical combinations?

who proposed the law of chemical combinations?

Ppc , two countries workland and playland have similar population and ident...

two countries workland and playland have similar population and identical production possibilities curves but diffrefences . the procuction possibilities combination are as follows

I dont understand this, Joe Brown’s dairy operates in a perfectly competiti...

Joe Brown’s dairy operates in a perfectly competitive marketplace. Joe’s machinery costs $500 per day and is the only fixed input. His variable costs are comprised of the wages pai

Use of income elasticity of demand, Use of Income elasticity of demand: ...

Use of Income elasticity of demand: Income elasticity of demand on the other hand, has the following uses (i) Income elasticity of demand shows how the pattern of consumer de

Asymmetric information - insurance markets, Q. Asymmetric Information - Ins...

Q. Asymmetric Information - Insurance Markets? In the United States, health insurance is usually provided for employees through contracts between the insurance company and thei

Micro Economic Theory, a monopolist faces a demand curve Qd- 120-2p and has...

a monopolist faces a demand curve Qd- 120-2p and has costs given by C(Q)=20Q+100 (marginal cost is constant at $20) a. What is the optimal Price and Quantity for this monopolist?

122, 0.767 g of phosphorus and 0.650 g of chlorine were allowed to react. A...

0.767 g of phosphorus and 0.650 g of chlorine were allowed to react. After the reaction was complete, all of the chlorine had been consumed, but 0.650 g of phosphorus remained. How

Measuring economies of scale in long run, Economies and Diseconomies of Sca...

Economies and Diseconomies of Scale -Economies of Scale Increase in the output is greater than increase in the inputs. -Diseconomies of Scale Increase in the

Statistics, define statistics in plural and singular sense

define statistics in plural and singular sense

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd