Refer to the table to answer two questions. Changes in Real GDP Growth When the GDP growth rate decreases by one percentage point 1. Government spending (G) automatically increases for Unemployment insurance benefits Food stamps. Welfare benefits Social Security benefits. Medicaid 2. Government tax revenues (T) automatically decline for Individual income taxes. Corporate income taxes. Social Security payroll taxes. 3. The deficit increases by $67 billion. Changes in Inflation When the inflation rate increases by one percentage point 1. Government spending (G) automatically increases for Indexed retirement and Social Security benefits Higher interest payments 2. Government tax revenues (T) automatically increase for Corporate income taxes Social Security payroll taxes. 3. The deficit increases by $40 billion. 14 What would happen to the budget deficit if the Instructions: Enter your responses as a whole number. a. GDP growth rate jumped from 2 percent to 4 percent? The budget deficit would [(Click to select) by $1 b. inflation rate increased by two percentage points? The budget deficit would (Click to select) by $ billion. billion.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Refer to the table to answer two questions.
Changes in Real GDP Growth
When the GDP growth rate decreases by one percentage point
1. Government spending (G) automatically increases for
Unemployment insurance benefits
Food stamps,
Welfare benefits.
Social Security benefits.
Medicaid
2. Government tax revenues (T) automatically decline for
Individual income taxes.
Corporate income taxes.
Social Security payroll taxes.
3. The deficit increases by $67 billion.
Changes in Inflation
When the inflation rate increases by one percentage point
1. Government spending (G) automatically increases for
Indexed retirement and Social Security benefits.
Higher interest payments
2. Government tax revenues (T) automatically increase for
Corporate income taxes.
Social Security payroll taxes.
3. The deficit increases by $40 billion.
19
What would happen to the budget deficit if the
Instructions: Enter your responses as a whole number.
a. GDP growth rate jumped from 2 percent to 4 percent?
The budget deficit would [(Click to select) by $
b. inflation rate Increased by two percentage points?
The budget deficit would (Click to select) by $
billion.
billion.
Transcribed Image Text:Refer to the table to answer two questions. Changes in Real GDP Growth When the GDP growth rate decreases by one percentage point 1. Government spending (G) automatically increases for Unemployment insurance benefits Food stamps, Welfare benefits. Social Security benefits. Medicaid 2. Government tax revenues (T) automatically decline for Individual income taxes. Corporate income taxes. Social Security payroll taxes. 3. The deficit increases by $67 billion. Changes in Inflation When the inflation rate increases by one percentage point 1. Government spending (G) automatically increases for Indexed retirement and Social Security benefits. Higher interest payments 2. Government tax revenues (T) automatically increase for Corporate income taxes. Social Security payroll taxes. 3. The deficit increases by $40 billion. 19 What would happen to the budget deficit if the Instructions: Enter your responses as a whole number. a. GDP growth rate jumped from 2 percent to 4 percent? The budget deficit would [(Click to select) by $ b. inflation rate Increased by two percentage points? The budget deficit would (Click to select) by $ billion. billion.
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