Answer the question using the following budget information for a hypothetical ec

Question

Answer the question using the following budget information for a hypothetical economy. Assume that all budget surpluses are used to pay down the public debt. Government Spending Tax Revenues GDP $450 500 $425 450 $2,000 3,000 Year 1 Year 2 4,000 5005,000 Year 3 Year 4 Year 5 Year 6 600 640 680 600 620 580 620 4,800 5,000 14. Refer to the above data. If year 1 is the first year of this nation's existence and year 6 is the present year, this nation's public debt is: a. $275 billion. b. $100 billion. c. $3,540 billion. d. $230 billion. 15. Refer to the above data. If year 1 is the first year of this nation's existence and year 4 is the present year, the public debt as a percentage of GDP in year 4 lis: a. 7.5 percent b 1.39 percent. c. 2.5 percent. d. 3.9 percent.

Explanation / Answer

14 - a) 275 million$

public debts = tax revenue - govt spending government

15 c) 2.5

Government spending - tax revenue/ GDP

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