Suppose the goal of the government is to balance its total budget. Suppose as well that the

Question:

Suppose the goal of the government is to balance its total budget. Suppose as well that the interest rate paid on government debt is 7% and the amount of government debt outstanding is $500 billion. How large must be the primary surplus?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Macroeconomics

ISBN: 978-0321675606

6th Canadian Edition

Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore, Ronald D. Kneebone

See More Books

Question Posted: Apr 01, 2016 03:59 AM

See More Questions

Suppose GDI' is $1000 billion, the national debt last year was $500 billion, the interest rate paid on government debt is 7%, and GDP is growing by 5% per year. a. If the goal of the government is to...
In Canada, producers of milk, poultry, and eggs are protected by government-imposed supply management rules. This supply management system is made up of a combination of import controls, production...
Suppose that the goal of the fiscal authority is to set government spending so as to achieve economic efficiency, while the goal of the monetary authority is to achieve stability of the price level...
Suppose that two linear equations are graphed on the same set of coordinate axes. Sketch what the graph might look like if the system has the given description. (a) The system has a single solution....
Multiple Choice 1. Which of the following is not a part of the role of internal auditors? a. Assisting the external auditors. b. Providing reports on the reliability of financial statements to...
Tristan, who is single, operates three sole proprietorships that generate the following information in 2022 (none are specified services businesses). Tristan chooses not to aggregate the businesses....
A solar collector design consists of an inner tube enclosed concentrically in an outer tube that is transparent to solar radiation. The tubes are thin walled with inner and outer diameters of 0.08...
Hallihan Company completed the following selected transactions during June 2010: June 1. Established a petty cash fund of $500. 12. The cash sales for the day, according to the cash register records,...
On June 1, 2025, Concord Company sold some equipment for $23800. The original cost was $81800, the estimated salvage value was $9200, and the expected useful life was 8 years. The equipment was fully...
In this module you will apply attribute sampling to Brony's Bikes' prenumbered sales invoices to evaluate whether sales have been processed properly. Recall from Module II that several deficiencies...
Suppose that all workers value their leisure at 90 goods per day. The production function relating output per day Y to the number of people working per day N is Y = 250N - 0.5N2. Corresponding to...
Evaluate the following claim: To reduce the debt-GDP ratio, governments must maintain primary surpluses.
Belk Antiques uses the periodic inventory system to account for its inventory transactions. The following account titles and balances were drawn from Belks records for the year 2013: beginning...
Discuss at least five of the formatting decisions you would have to make when typing a table. Compare the decisions you provided to those of two of your classmates. Do you agree or disagree with the...
Supposons un consommateur ayant une richesse W qui est distribue selon une loi de densit de probabilit fw (w). Montrez qu'on peut obtenir une approximation du cot du risque, CR, en utilisant: 1 CRrr...
3. Assume that the web-hosting service industry is pertectly competitive and that all web-hosting service providers are identical. Also assume that web-hosting services occur at datacenters that...
Suppose that farmers have a mandatory demand expansion program where all farmers pay a certain amount to fund a promotion program. You have estimated the following market supply and demand functions...
Imagine that you lend $5,000 to a friend at 7%, and say, "Pay me back when you get a job." Five years later, your friend gets a job and pays you back. Your friend assumed that you meant simple...
The following histogram summarizes Apple Inc.s monthly stock price for the years 2014 through 2018. a. Is the distribution symmetric? If not, is it positively or negatively skewed? b. Over this...
Express these numbers in standard notation. a. 2.87 10-8 b. 1.78 1011 c. 1.381 10-23
Hotel rooms in Small town go for $100, and 1,000 rooms are rented on a typical day. a. To raise revenue, the mayor decides to charge hotels a tax of $10 per rented room. After the tax is imposed, the...
Suppose that a market is described by the following supply and demand equations: QS = 2P QD = 300 P a. Solve for the equilibrium price and the equilibrium quantity. b. Suppose that a tax of T is...
Draw the supply-and-demand diagram for an importing country. What is consumer surplus and producer surplus before trade is allowed? What is consumer surplus and producer surplus with free trade? What...
Paraphrase this "To fight the 2008 financial crisis, the United States employed a combination of fiscal and monetary policies. On the budgetary front, Congress passed the ailing Asset Relief Program...
a) A company just paid a dividend of Do = $5.00 on its preferred stock. The dividend amount will remain constant. The discount rate (i.e., market capitalization rate) of the company is k = 8%. What...
Jessica is planning to paint her room. It measures 11 feet by 13 feet and has 8 -foot ceilings. One long wall and one short wall each have a window that measures 3 feet by 4 feet. One short wall has...

Suppose the goal of the government is to balance its total budget. Suppose as well that the

Question:

Step by Step Answer:

From Eq 151 we know that surplus primary ...View the full answer

Macroeconomics

Students also viewed these Economics questions