ec - Chapter 14 Deficit Spending and The Public Debt...

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Deficit Spending and The Public Debt Chapter 14
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Slide 13-2 Chapter Outline Entitlements
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Slide 14-3 A government budget deficit Exists if the government spends Is financed by the selling of government securities (bonds)
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Slide 14-4 If spending equals receipts, the budget is If receipts exceed spending, the government is running a budget
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Slide 14-5 The public debt The total value of all The sum of all
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Slide 14-6 Some government bonds are held by In this case, the funds are owed from one branch of To arrive at the net public debt , we subtract
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Slide 14-7 Debt Issues & Problems
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Slide 14-8 Debt Issues & Problems: Interest on the debt The government must pay The level of these payments depends on the Interest payments as a percentage of GDP are likely
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Slide 14-9 Debt Issues & Problems: Ownership of debt As more of the public debt is held by foreigners, then the amount of interest The presence of the debt may place a
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Slide 14-10 Debt Issues & Problems: Crowding Out If the economy is already at full employment, then further provision of government goods will Deficit spending may raise interest rates, which in turn will
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Slide 14-11 Debt Issues & Problems: Burdens on Future Generations Burdens on Future Generations: Crowding out then may place a burden on future generations by Taxes may be
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Is there anything positive about the public debt? While the debt in and of itself may not
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This note was uploaded on 04/19/2011 for the course ECON 200 taught by Professor Staff during the Winter '09 term at Indiana.

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ec - Chapter 14 Deficit Spending and The Public Debt...

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