MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 13, Problem 19SQ
To determine
The national debt and national bankruptcy.
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Explain the difference between the budget deficit and the nation
Explain the difference between the budget deficit and the national debt. If the deficit gets turned into a surplus, what happens to the debt?
Explain the difference between the budget deficit and the nation
Explain the implications of the national debt's projected trend on the economy.
A. The increasing national debt could force interest rates to rise. The cost of borrowing increases for governments, businesses, and households from the decreased value of the dollar.
B. The increasing national debt could force lower interest rates and lower inflation because there is less demand for investors buying the debt. This could result in deflation.
C. The lower national debt will help keep interest rates and inflation low. The cost of borrowing decreases for governments, businesses, and households, helping to spur the economy.
D. The national debt is neither expanding nor contracting. The government can maintain low interest rates and inflation with a balanced budget, sustaining strong economic growth.
True or false and explain: The national debt represents a threat of bankruptcy.
Chapter 13 Solutions
MACROECONOMICS FOR TODAY
Ch. 13.1 - Prob. 1YTECh. 13.1 - Prob. 2YTECh. 13.3 - Prob. 1YTECh. 13.3 - Prob. 2YTECh. 13 - Prob. 1SQPCh. 13 - Prob. 2SQPCh. 13 - Prob. 3SQPCh. 13 - Prob. 4SQPCh. 13 - Prob. 5SQPCh. 13 - Prob. 6SQP
Ch. 13 - Prob. 7SQPCh. 13 - Prob. 8SQPCh. 13 - Prob. 9SQPCh. 13 - Prob. 10SQPCh. 13 - Prob. 11SQPCh. 13 - Prob. 1SQCh. 13 - Prob. 2SQCh. 13 - Prob. 3SQCh. 13 - Prob. 4SQCh. 13 - Prob. 5SQCh. 13 - Prob. 6SQCh. 13 - Prob. 7SQCh. 13 - Prob. 8SQCh. 13 - Prob. 9SQCh. 13 - Prob. 10SQCh. 13 - Prob. 11SQCh. 13 - Prob. 12SQCh. 13 - Prob. 13SQCh. 13 - Prob. 14SQCh. 13 - Prob. 15SQCh. 13 - Prob. 16SQCh. 13 - Prob. 17SQCh. 13 - Prob. 18SQCh. 13 - Prob. 19SQCh. 13 - Prob. 20SQ
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- 16. When the federal government runs a budget deficit: it borrows money from the public by issuing bonds. interest payments on the existing debt increase. transfer payments tend to increase. 4. the total volume of the national debt decreasesarrow_forwardExamples of a long term debt cyclearrow_forwardThe government debt is None of these answers is correct. the total accumulation of deficits in the current period. the outstanding stock of bonds that have been issued in the past. equal to total tax receipts. the annual difference between government spending and tax revenues.arrow_forward
- What is likely to be the immediate effect on a country's national debt if the government decides to increase public spending without raising taxes? A. The national debt will decrease. B. The national debt will increase. C. There will be no change in the national debt. D. The national debt will initially increase, but then decrease as the economy grows.arrow_forwardThe Malaysian government has introduced a new committee as a fiscal management reform initiative. This committee is known as ____. A.Public Mutual Committee / Jawatankuasa Awam Bersama B.Jawatankuasa Pemungut Hutang / Debt Collector Committee C.Public Account Committtee / Jawatankuasa Kira-Kira Wang Awam D.Debt Management Committee / Jawatankuasa Pengurusan Hutangarrow_forwardIn case the government is experiencing deficit in its budget, it resorts to borrowing to close the deficit. Can you explain to what extend public debt could have positive or negative impact on society?arrow_forward
- How does an increase in government spending without a change in taxes typically affect the national debt? A. The national debt decreases because government spending stimulates the economy. B. The national debt remains unchanged because the increase in spending is offset by economic growth. C. The national debt increases because government spending exceeds tax revenues. D. The national debt fluctuates unpredictably due to the complex nature of economic variables.arrow_forwardWhat is the concept of a budget deficit? A. Government spending exceeds government revenue B. Government revenue exceeds government spending C. Government spending is equal to government revenue D. Government debt is reduced to zeroarrow_forward12. The national debt in the current year is equal to the national debt at the beginning of the year minus the annual budget deficit. a. b. equal to the national debt at the end of the year plus the annual budget deficit. equal to the national debt at the beginning of the year plus the annual budget deficit. C. d. none of the above. H. Iarrow_forward
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