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.
The difference between the gross public debt and the
net public debt is that the a. gross public debt includes
government interagency borrowing while the net
public debt does not. b. the gross public debt is
expressed as a percentage of GDP while the net public
debt is not. c. gross public debt is based on budget
deficit while the net public debt is not based on budget
deficits. d. gross public debt includes entitlements while
the net public debt does not.
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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- True or false and explain: The national debt represents a threat of bankruptcy.arrow_forwardExplain how a budget deficit arises and what actions governments must take in this circumstance. How does the budget deficit relate to the national debt?arrow_forwardThe Federal Reserve and the federal government agencies hold more than half the public debt. TRUE OR FALSEarrow_forward
- Saved The size of the national debt increases when the federal government runs a deficit. True or False True Falsearrow_forward16. 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_forward
- Explain the difference between budget deficit and national debt.arrow_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_forwardWhat 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_forward
- The 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_forwardHow 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_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
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