# Macroeconomics

posted by .

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?

• Macroeconomics -

do you have a question?

## Similar Questions

1. ### economics

I have a couple of questions, thanks so much. If a country were to increase the value of their currency, how could that improve their economy?
2. ### college-economics

The gross national debt initially is equal to \$3 trillion and the federal government then runs a deficit of \$300 billion: total 5 questions. Confused, believe gross debt = all fed govt debt What is the new level of gross national debt?
3. ### College Econ

The gross national debt initially is equal to \$2.5 trillion and the federal government then runs a defict of \$100 billion: 1. What is the new level of gross national debt?

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?
5. ### Economics

Assume that the gross national debt initially is equal to \$3 trillion and the federal government then runs a deficit of \$300 billion. i. What is the new level of gross national debt?
6. ### Macroeconomics

If GDP increases by 5 percent in the same that the deficit is run, What happens to gross debt as a percentage of GDP?
7. ### macroeconomics

b. 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: i. What is the new level of gross national debt?
8. ### MATH 12

Canada's national debt fluctuates. It is affected by financial markets (such as stock, bond, currency, and commodity markets), the gross domestic product (the gross value of all goods and services produced in the country), and the …
9. ### Macroeconimcs

2. Suppose the national debt is \$80 trillion and the government spends \$800 billion during the fiscal year on goods and services. In addition, the government collects tax revenues of \$600 billion and makes transfer payments equal to …
10. ### Macroeconomics

Suppose the national debt is \$80 trillion and the government spends \$800 billion during the fiscal year on goods and services. In addition, the government collects tax revenues of \$600 billion and makes transfer payment equal to \$300 …

More Similar Questions