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Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884 Exercise 21
Use the following CBO report to work the Problems.
Fiscal 2012 Deficit: Smaller, But Still Big
The budget deficit was about $1.1 trillion in fiscal year 2012, CBO estimates. That is about $200 billion smaller than in 2011, but still ranks as the fourth-largest deficit since World War II.
a. How would the budget deficit change in 2013 and 2014 if the Fed moved interest rates up?
b. How would the budget deficit change in 2013 and 2014 if the Fed's monetary policy led to a rapid depreciation of the dollar?
Fiscal 2012 Deficit: Smaller, But Still Big
The budget deficit was about $1.1 trillion in fiscal year 2012, CBO estimates. That is about $200 billion smaller than in 2011, but still ranks as the fourth-largest deficit since World War II.
a. How would the budget deficit change in 2013 and 2014 if the Fed moved interest rates up?
b. How would the budget deficit change in 2013 and 2014 if the Fed's monetary policy led to a rapid depreciation of the dollar?
Explanation
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a.
Higher interest rate and deficit bud...
Macroeconomics 11th Edition by Michael Parkin
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