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If the us has an increasing deficit it is likely

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If the U.S. has an increasing deficit, it is likely prices will be increased everywhere. That will cause people to spend less money. In turn, the clothing company will lose business.
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Effects of U.S.’s Deficit, Surplus and Debt 6 If the U.S. has an increase surplus, this will cause prices to fall and decrease. This will cause people to spend more money. Businesses will be able to thrive and have an increase in their surplus. Gross Domestic Product The US’s debt has an effect on the GDP because the higher the debt, the higher the debt- to-GDP ratio will get. The debt-to-GDP ratio tells investors how likely a country will be able to repay their debt. A surplus would affect the GDP in a positive way only if the extra money is used for spending. The government could either spend it on things like new infrastructures, government funded programs or defense spending. Or they could allocate it to taxpayers and only if the taxpayers were to use the extra funds to purchase items would it be a positive thing for the GDP. Having a deficit does not affect the US like other countries because they can print their own money. When running in a deficit, the government usually has creditors it owes. The US dollar is a global currency and when the creditors come calling, the government creates more money to pay them off, causing government spending to increase and GDP to increase as well.
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Effects of U.S.’s Deficit, Surplus and Debt 7 References Colander, D. C. (2010). Macroeconomics (8 th ed.). Boston, MA: McGraw-Hill/Irwin. Harrington, J. (2013). Florida pays off federal loan used to keep unemployment benefits flowing. Retrieved 26 May 2013, from http://www.tampabay.com/news/business/personalfinance/floridas-pays-off- federal-loan-used-to-keep-unemployment-benefits-flowing/2122647. Hirsch, M. (2013). Sequester cuts to federal unemployment benefits start to hit in many states. Retrieved 26 May 2013, from http://unemployedworkers.org/sites/unemployedworkers/index.php/site/blog_entr y/sequester_cuts_to_federal_unemployment_benefits_start_to_hit_in_many_state Waggoner, J. (2013). Social Security: 5 things you need to know. Retrieved 25 May 2013, from http://www.usatoday.com/story/money/personalfinance/2013/02/26/social- security-myths-and-tips/1946975/ Thompson, Michael F. (2013) Employment and Economic growth in the U.S Automotive Manufacturing Industry: Considering the Impact of American and Japanese Automakers .Retreived 5/26/2013 from http://www.ibrc.indiana.edu/ibr/2010/spring/article2.html. Who really owns the u.s. national debt?. (2013). Retrieved from http://finance.townhall.com/columnists/politicalcalculations/2013/01/21/who- really-owns-the-us-national-debt-n1493555/page/full
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