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Assume which the gross national debt initially is equal to $3 trillion and the federal government then runs a deficit of $300 billion.

i. Illustrate what is the new level of gross national debt?

ii. If 100 percent of the deficit is financed by the sale of securities to federal agencies, Illustrate happens to the amount of debt held by the public? Illustrate what happens to the level of gross debt?

iii. If GDP increased by 5 percent In the same year which the deficit is run, Illustrate what happens to the GDP? Illustrate what happens to the level of debt held by the public as a percentage of GDP?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9159506

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