ECON 2133 Lecture Notes - Lecture 3: United States Treasury Security, Iou, Fiduciary

46 views2 pages

emeraldbeaver977

23 Feb 2017

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Government spending = tax revenues it is a balanced budget (1969) Government spending > tax revenues it is a federal budget deficit (borrow) Government spending < tax revenues it is a surplus (1998, 1999, 2000) * fiscal year begins october 1 and ends september 30 * 2008 federal budget deficit was . 4 trillion and us treasury issued ious. Fiscal year borrowing was . 4 trillion, federal indebtedness increased by. The deficit is a (cid:498)flow(cid:499) variable and shows so much per unit of time; it. The national debt is the (cid:498)stock(cid:499) variable is also equal to the change in national debt (so every year you have a deficit, you add it to national debt by that much) National debt = sum total of all outstanding treasury securities issued to finance past budget deficits that have not been paid back. * current deficit is ~ trillion * * is the responsibility of the us treasury to finance the operations of government *

Related Questions

Many economic analysts, including those at the US Congressional Budget Office, have forecasted growing US federal budget deficits. NOTE: The budget deficit is defined as the difference between all government expenditures and all government revenues - G-T. The size of the deficits grew after the enactment of the "Tax Cut and Jobs Act" in 2017.

As members of a team that is advising the US government, you are tasked with developing a plan which reduces the budget deficit by 1 trillion dollars over the forecast horizon specified: The starting year will be 2019 and your ending year will be 2028. To do so, you will have to recommend spending reductions, tax increases, or some combination thereof, over the years between the current year and the end of the horizon.

Q. To achieve the specified deficit reduction target ($1 trillion), decide the composition of the adjustmentsâhow much tax, how much spending. Briefly discuss why you made your choices; you may introduce political considerations.

amethystarmadillo770

1) If the tax multiplier is -1.5 and a $200 billion tax increase is implemented, what is the change in GDP, holding everything else constant? (Assume the price level stays constant.)

2) Suppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the president and the Congress increased government purchases by $500 billion, what would be the result on the economy?

3) Suppose the federal budget deficit for the year was $100 billion and the economy was in a recession. If the economy had been at potential GDP, it is estimated that tax revenues would have been $60 billion higher and government spending on transfer payments $50 billion lower. Using these estimates, what was the cyclically adjusted budget deficit or surplus for the year?

4) How could the existence of an unemployment insurance system or other transfer programs have reduced the severity of the Great Depression?

apricotbuffalo114

1. The government has a balanced budget when the economy is at full employment. When the economy weakens, tax revenue ________ and spending on transfers _________. This causes a ____________ ______________.

2. Social Security has revenues of $1.8 trillion and expenditures of $1.3 trillion. The nonsocial Security budget has revenue of $2.1 trillion and expenditures of $2.4 trillion. The official budget will report a _______________ (deficit/surplus) of $___________________. The national debt will ____________ (rise/ fall) by $______________.

Answer True or False for each of the following.

In recent years government debt grew much faster than GDP.

Conservative economists blame repealing Glass-Steagall for the financial crisis.

In the last few years, the US has run the largest nominal deficits in US history.

Foreigners own more of the national debt today than 40 years ago

The Great Recession results in part from rapidly rising oil prices.

Subprime mortgages are those made at interest rates below the prime rate.

Economists agree that de-regulation lay behind the financial crisis.

Credit deposit swaps are mortgage-based derivatives.

Social Security runs completely out of money and canât pay benefits by 2018.

The national debt to GDP ratio in the U.S. has never been higher than right now.

ceruleancrow374

ECON 2133 Lecture Notes - Lecture 3: United States Treasury Security, Iou, Fiduciary

Document Summary

Get access

Related Documents

ECON 2133 Study Guide - Midterm Guide: Procyclical And Countercyclical, Dot-Com Bubble, Equal Pay For Equal Work

ECON 2133 Lecture Notes - Lecture 2: Procyclical And Countercyclical, Aggregate Demand

ECON 2133 Lecture Notes - Lecture 4: Cash Flow, Ricardian Equivalence

Related Questions