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28 Sep 2019
The economy of Joelâs Capitalist Utopia can be modeled by the following planned expenditure functions (all numerical values in millions):
C=80+0.8YD, NX=30-0.06y, I=10, G=25
Note that the net tax rate is 5% of national income (GDP). In all of the following calculation questions, show your work where indicated and record your final answers in the provided boxes. Assume the government faces an outstanding national debt of $250, on which it must pay 5% interest.
a. Calculate the governmentâs current deficit in the short-run equilibrium.
b. Calculate the governmentâs structural deficit.
c. Calculate the governmentâs primary deficit.
The economy of Joelâs Capitalist Utopia can be modeled by the following planned expenditure functions (all numerical values in millions):
C=80+0.8YD, NX=30-0.06y, I=10, G=25
Note that the net tax rate is 5% of national income (GDP). In all of the following calculation questions, show your work where indicated and record your final answers in the provided boxes. Assume the government faces an outstanding national debt of $250, on which it must pay 5% interest.
a. Calculate the governmentâs current deficit in the short-run equilibrium.
b. Calculate the governmentâs structural deficit.
c. Calculate the governmentâs primary deficit.
Retselisitsoe PokothoaneLv10
28 Sep 2019
