As can be seen from the above table, the budget is in a $55 billion surplus position. If the assumption is made that the government will retire debt, the likely effect will be to reduce total spending in the economy. Under that scenario, prices, employment and interest rates will fall. Note that this net result can occur whether the retired debt is purchased from the nonbank public, depository institutions or Federal Reserve Banks.
What were the government's total revenues and expenditures in the most recent fiscal year? Was the budget in surplus or deficit? All other factors held constant, what is likely to happen to the economy's level of income and interest rates as a result of this year's government budget position? Please explain the reasoning behind your answer to this last question.

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The Answer of As can be seen from the above table, the budget is in a $55 billion surplus position. If the assumption is made that the government will retire debt, the likely effect will be to reduce total spending in the economy. Under that scenario, prices, employment and interest rates will fall. Note that this net result can occur whether the retired debt is purchased from the nonbank public, depository institutions or Federal Reserve Banks.
What were the government's total revenues and expenditures in the most recent fiscal year? Was the budget in surplus or deficit? All other factors held constant, what is likely to happen to the economy's level of income and interest rates as a result of this year's government budget position? Please explain the reasoning behind your answer to this last question.

As Can Be Seen from the Above Table, the Budget