Wednesday
July 30, 2014

Homework Help: Macroeconomics

Posted by Jenny on Monday, April 14, 2008 at 11:24pm.

The following calculations help you see how the ratio of debt to GDP changes from one year to the next. Suppose that in a hypothetical country with a currency called the ducat, debt is equal to 140 trillion ducats and GDP is equal to 100 trillion ducats. This means that the ratio of debt to GDP is 1.4, or 140%. Also, suppose that the deficit is 7 trillion ducats, which is 7% of GDP.

When the government runs a deficit, it spends more than it collects in tax revenue. To make up the difference, it borrows. So if it runs a deficit of 7 trillion ducats, debt increases by 7 trillion ducats. So debt next year is 147 trillion ducats. Suppose that there is no growth in real GDP and inflation is equal to -2% per year. (Negative inflation is the same as deflation.) Measured in ducats, what will GDP be equal to next year?

---What formula do i use to solve this?
V=GDP/m?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

economics - I have a couple of questions, thanks so much. If a country were to ...
macroeconomics - 23. The next four questions refer to the following price and ...
macroeconomics - b. Now suppose that the gross national debt initially is equal ...
Macroeconomics - suppose that this year's money supply is $500b, nominal gdp is...
Macroeconomics - If GDP increases by 5 percent in the same that the deficit is ...
Macroeconomics - Suppose that velocity is constant. The economy's output of ...
Economics - Assume that the gross national debt initially is equal to $3 ...
macroeconomics - Year - 2000 Nominal GDP: 9,817 Real GDP: ___________ GDP ...
Macroeconomics - How do you calculate the nominal GDP and the real GDP of ...
MATH 12 - Canada's national debt fluctuates. It is affected by financial markets...

Search
Members