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?

If 100 percent of the deficit is financed by the sales of securities to federal agencies, what happens to the amount of debt held by the public?
What happens to the level of gross debt?

If GDP increases by 5 percent in the same that the deficit is run, What happens to gross debt as a percentage of GDP? What happens to the level of debt held by the public as a percentage of GDP?

HELP!!!

A. What is the new level of gross national debt?
B. if 100%of the deficit is financed by the sale of secruties to federal agencies, what happens to the amount of debt held by the public? What happens to the level of gross debt?
C. If GDP increases by 5% in the same year that the deficit is run, what happens to gross debt as a % of GDP? What happens to the level of debt held by the public as a % of GDP?
Then, suppose that the gross natioanl debt initially is equal to $2.5 trillion and the federal government then runs a deficit of $100 billion:
A. What is the new level of gross national debt?
B. If 100% of this deficit is financed by the sale of secrutites to the public, what happends to the level of debt held by the public? What happends to the level of gross debt?
C. If GDP increase by 6% in the same year as the deficit is run, what happens to gross debt as a % of GDP? What happends to the level of debt held by the public as a % of GDP?

Question 1: What is the new level of gross national debt?

The new level of gross national debt can be calculated by adding the deficit to the initial debt. In this case, the initial gross national debt is $3 trillion and the deficit is $300 billion.

New Gross National Debt = Initial Debt + Deficit
New Gross National Debt = $3 trillion + $300 billion
New Gross National Debt = $3.3 trillion

Therefore, the new level of gross national debt is $3.3 trillion.

Question 2: If 100 percent of the deficit is financed by the sales of securities to federal agencies, what happens to the amount of debt held by the public?

If 100 percent of the deficit is financed by the sales of securities to federal agencies, it means that the entire deficit is funded internally by the government itself. This means there is no change in the amount of debt held by the public. The debt held by the public remains the same.

Question 3: What happens to the level of gross debt?

Since the entire deficit is financed internally by the government through the sales of securities to federal agencies, there is no change in the level of gross debt. The gross debt remains the same.

Question 4: If GDP increases by 5 percent in the same year that the deficit is run, what happens to gross debt as a percentage of GDP?

To determine the new gross debt as a percentage of GDP, we need to divide the gross debt by the GDP and multiply by 100. If GDP increases by 5 percent, it means that it has grown by 5 percent.

New Gross Debt as a Percentage of GDP = (Gross Debt / GDP) * 100

As we are given the values of the gross debt and GDP, we can substitute them into the formula:

New Gross Debt as a Percentage of GDP = ($3.3 trillion / (Initial GDP * 1.05)) * 100

If we assume the initial GDP is denoted as "Initial GDP," we can simplify the formula:

New Gross Debt as a Percentage of GDP = ($3.3 trillion / (Initial GDP * 1.05)) * 100

Therefore, the gross debt as a percentage of GDP will decrease.

Question 5: What happens to the level of debt held by the public as a percentage of GDP?

Since the entire deficit is financed internally by the government through the sales of securities to federal agencies, there is no change in the debt held by the public. Therefore, the level of debt held by the public as a percentage of GDP remains the same.

To answer these questions, let's break down each scenario and explain how to calculate the new levels of gross national debt and debt held by the public.

1. What is the new level of gross national debt?
To calculate the new level of gross debt, you need to add the deficit to the initial debt. In this case, the initial gross national debt is $3 trillion, and the federal government runs a deficit of $300 billion. So, the new level of gross national debt can be calculated by summing the initial debt and the deficit:
New gross national debt = Initial gross national debt + Deficit
New gross national debt = $3 trillion + $300 billion
New gross national debt = $3.3 trillion

2. If 100 percent of the deficit is financed by the sales of securities to federal agencies, what happens to the amount of debt held by the public?
When the deficit is financed by the sales of securities to federal agencies, the debt held by the public remains unchanged. This is because the federal agencies are considered part of the public sector, so the debt they hold is simply transferring from one part of the public sector to another.

3. What happens to the level of gross debt?
The level of gross debt would increase by the amount of the deficit. In this case, if the deficit is $300 billion, the level of gross debt would increase by $300 billion.

4. If GDP increases by 5 percent at the same time that the deficit is run, what happens to gross debt as a percentage of GDP?
To calculate the gross debt as a percentage of GDP, divide the gross debt by the GDP and multiply by 100. If the GDP increases by 5 percent, we need to calculate the new gross debt as a percentage of the new GDP.
Gross debt as a percentage of GDP = (New gross national debt / New GDP) * 100

5. What happens to the level of debt held by the public as a percentage of GDP?
Similar to the previous question, to calculate the debt held by the public as a percentage of GDP, divide the debt held by the public by the GDP and multiply by 100. Since the debt held by the public remains unchanged when the deficit is financed by federal agencies, the percentage would remain the same as well.
Debt held by the public as a percentage of GDP = (Debt held by the public / GDP) * 100

To get precise calculations, you would need to know the values for GDP and the initial debt, but the explanations provided above guide you on how to calculate the new levels and percentages based on the given information.

1) 3.3 Trillion, obviously

2) Securities are debt held by someone else, e.g., the public. So, debt held by the public rises by $300B. 3) No change to the overall level of gross debt.
4) Debt as a percent of GDP is simply debt divided by GDP. So, if the denominator, goes up, the whole term goes down. 5) same logic.