Homework Answers
ANSWER:
The correct answer is option d that is deficit of $100 million per year and a debt of $1 billion. (deficit = annual expenditures - annual revenues = $1.6 billion - $1.5 billion = $0.1 billion or $100 million and $100 million * 10 = $1,000 million or $1 billion in 10 years.)
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if
government has no debt initially but then has annual revenues of
1.5 billion for 10...
Suppose the existing stock of government debt is $600 billion. The interest rate is 10%. Government...
Suppose the existing stock of government debt is $600 billion. The interest rate is 10%. Government purchases are $50 billion, and government transfers another $40 billion. Tax revenue is $100 billion. Which of the following is true? a) The budget is balanced b) There is a budget deficit of $50 billion c) There is a budget deficit of $60 billion d) There is a budget surplus of $10 billion
Lecture 10 Suppose the fictitious country of Islandia begins fiscal year 1 with no public debt....
Lecture 10 Suppose the fictitious country of Islandia begins fiscal year 1 with no public debt. The tax revenues and government expenditures for the next five years are shown in the table below. Instructions: In parts a and b, enter your answers as whole numbers. In part c, round your answer to 1 decimal place. Enter a positive number for a surplus and a negative number for a deficit (debt). Tax Revenues. Expenditures, a. Calculate the deficit or surplus for...
1. If the state of Texas's government collects $127 billion in tax revenues in 2015 and...
1. If the state of Texas's government collects $127 billion in tax revenues in 2015 and total spending in the same year is $128.5 billion, the result will be a: A. budget deficit. B. budget surplus C. decrease in payroll tax. D. decrease in proportional taxes. 2. A government annually spends $7 billion of its total tax revenue to weather related disaster relief, $25 billion to healthcare and $13 billion to education. If the government's annual tax revenue is $132...
61. Why does the federal debt tend to increase during recessions? A. Economic activity decreases, which...
61. Why does the federal debt tend to increase during recessions? A. Economic activity decreases, which decreases revenues and increases outlays B. Economic activity decreases, which decreases revenues and decreases outlays. C. Economic activity increases, which increases revenues and increases outlays. D. Economic activity increases, which increases revenues and decreases outlays. Use the table below to answer the following two questions. Government Government tax revenues | expenditures (billions of dollars) Year (billions of dollars 120 110 1 2 135 130...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billio...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billion, and has spent $75 billion. The national debt at the beginning of 2015 is: A) $25 billion. B) $125 billion. C) $175 billion. D) $275 billion. 19. What approach to federal finance would you agree with if you wanted federal government revenues to equal federal government expenditures every year? A) annually balanced budget B) cyclically balanced budget C)...
1. GDP - annual debt 2. government spending - tax revenue >0 3.government spending - tax...
1. GDP - annual debt
2. government spending - tax revenue >0
3.government spending - tax revenue <0
4. annual debt/GDP
5 annual deficit/GDP
6. total debt - debt held by us households and institutions
==================================================
A budget deficit is government spending in excess of what?
A.. tax revenues
B. real GDP
C. household spending
D. consumption
================================================
What would happen to the cyclical deficit if the GDP growth rate
jumped from 2 percent to 4 percent?
A.decrease in deficit...
QULLIP A government is currently operating with an annual budget deficit of $40 billion. The movernment...
QULLIP A government is currently operating with an annual budget deficit of $40 billion. The movernment has determined that every $10 billion reduction in the amount of bonds it issues each year would reduce the market interest rate by 0.10 percentage point. Furthermore, it has determined that every 0.10 (one-fenth) percentage point change in the market interest rate generates a change in planned investment expenditures in the opposite direction equal to $4 billion. The marginal propensity to consume is 0.75....
Suppose a government has no debt and a balanced budget. Suddenly it decides to spend $4...
Suppose a government has no debt and a balanced budget. Suddenly it decides to spend $4 trillion while raising only $3 trillion 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 4 percent rate of interest, how much interest will the government pay each year? _________(d) Add the interest payment to the government’s $4 trillion expenditures for the next year,...
7. Which of the following statements is (are) correct? (x) Suppose government debt equaled zero until...
7. Which of the following statements is (are) correct? (x) Suppose government debt equaled zero until three years ago. In the last three years government had a budget deficit of $80 billion in each of the first two years and a budget surplus of $70 billion in the last year. At the end of the last year, the government had debt of $90 billion. (y) When the U.S. government is in debt, it follows that they have a deficit for...
You are trying to value ListoFact, a data processing company. The company generated $1 billion in revenues in the most recent financial year and expects revenues to grow 3% per year in perpetuity. It...
You are trying to value ListoFact, a data processing company. The company generated $1 billion in revenues in the most recent financial year and expects revenues to grow 3% per year in perpetuity. It generated $30 million in after-tax operating income in the most recent financial year and expects after-tax operating margin to increase 1% per year starting from the current year (Year 0) to year 3. After year 3, the margin will stabilize at year 3 levels forever. The...
Lecture 10 Suppose the fictitious country of Islandia begins fiscal year 1 with no public debt. The tax revenues and government expenditures for the next five years are shown in the table below. Instructions: In parts a and b, enter your answers as whole numbers. In part c, round your answer to 1 decimal place. Enter a positive number for a surplus and a negative number for a deficit (debt). Tax Revenues. Expenditures, a. Calculate the deficit or surplus for...
61. Why does the federal debt tend to increase during recessions? A. Economic activity decreases, which decreases revenues and increases outlays B. Economic activity decreases, which decreases revenues and decreases outlays. C. Economic activity increases, which increases revenues and increases outlays. D. Economic activity increases, which increases revenues and decreases outlays. Use the table below to answer the following two questions. Government Government tax revenues | expenditures (billions of dollars) Year (billions of dollars 120 110 1 2 135 130...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billion, and has spent $75 billion. The national debt at the beginning of 2015 is: A) $25 billion. B) $125 billion. C) $175 billion. D) $275 billion. 19. What approach to federal finance would you agree with if you wanted federal government revenues to equal federal government expenditures every year? A) annually balanced budget B) cyclically balanced budget C)...
1. GDP - annual debt
2. government spending - tax revenue >0
3.government spending - tax revenue <0
4. annual debt/GDP
5 annual deficit/GDP
6. total debt - debt held by us households and institutions
==================================================
A budget deficit is government spending in excess of what?
A.. tax revenues
B. real GDP
C. household spending
D. consumption
================================================
What would happen to the cyclical deficit if the GDP growth rate
jumped from 2 percent to 4 percent?
A.decrease in deficit...
QULLIP A government is currently operating with an annual budget deficit of $40 billion. The movernment has determined that every $10 billion reduction in the amount of bonds it issues each year would reduce the market interest rate by 0.10 percentage point. Furthermore, it has determined that every 0.10 (one-fenth) percentage point change in the market interest rate generates a change in planned investment expenditures in the opposite direction equal to $4 billion. The marginal propensity to consume is 0.75....
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