Help me to answer these below!!! 1) Read the article Budget Deficit Hits $666B,
ID: 1118672 • Letter: H
Question
Help me to answer these below!!!
1) Read the article Budget Deficit Hits $666B, an $80B Spike for the Year
https://www.usnews.com/news/business/articles/2017-10-20/budget-deficit-hits-666b-up-80b-as-tax-debate-kicks-off
a) How much is the change in tax code expected to add to the national debt over the next decade?
b) How will the government finance the increase in the budget deficit?
c) Will interest rates increase decrease or not change?
d) What is the budget deficit for the fiscal year 2016-2017?
e) What is the national debt?
f) Only knowing that the deficit rose by $80 billion this year, can you conclude that the government had an expansionary fiscal policy? Why or why not?
Explanation / Answer
a) How much is the change in tax code expected to add to the national debt over the next decade?
Answer : $1.5 trillion to the national debt in the next decade
b) How will the government finance the increase in the budget deficit?
Answer: A higher GDP growth could be achieved by a combination of smart spending restraint, tax reform and cutting red tape.
c) Will interest rates increase decrease or not change?
Answer: Interest rates will increase as government borrowing will crowd out private lending.
d) What is the budget deficit for the fiscal year 2016-2017?
Answer: $666 billion in 2016-17
e) What is the national debt?
Answer: More than $14 trillion.
f) Only knowing that the deficit rose by $80 billion this year, can you conclude that the government had an expansionary fiscal policy? Why or why not?
No. Budget deficits can also be caused by downturn in business cycles, natural disasters.
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