Posted by **queenie** on Monday, August 10, 2009 at 4:09pm.

I cannot figure this our for the life of me!Assume that the gross national debt initially is equal to $3 trillion and the federal government then runs a deficit of $300 billion. What is the new level of gross national debt? What happens to the amount of debt held by the public? What happens to the level of gross debt? When the government runs a deficit, it can borrow from the public and the level of gross debt increases. What happens to gross debt as a percentage of GDP? What happens to the level of debt held by the public percentage of GDP?

Now suppose that the gross national debt initially is equal to $2.5 trillion and the federal government then runs a deficit of $100 billion. What is the new level of gross national debt? What happens to the amount of debt held by the public? What happens to the level of gross debt? What happens to gross debt as a percentage of GDP? What happens to the level of debt held by the public percentage of GDP?

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