# The current fiscal policy plansprojections call for g

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The current fiscal policy plans/projections call for: g2011= \$4 trillion, t2011= \$2 trillion, g2012\$3 trillion, and t2012= \$2 trillion. Finally, given how low interest rates are right now and how low they are projected to remain for at least the next couple of years, suppose that the real interest rate is always zero (i.e., r = 0 always).a.(3 points) Assuming the projections above prove correct, what will be the numerical value of the federal government’s asset position at the end of 2011? Briefly explain/justifyin no more than two sentences.=
b.(3 points) Assuming the projections above prove correct, what will be the numerical value of the federal government’s asset position at the end of 2012? Briefly explain/justifyin no more than two sentences.
14Problem 5 continued
c.(3 points) Based on your answer in part a above,does the debt ceiling pose a problem for the government’s fiscal policy plans during the course of the year 2011? If it poses a problem, briefly describe the problem; if it poses no problem, briefly describe why it poses no problem.
d.(3 points) Based on your answer in part b above,does the debt ceiling pose a problem for the government’s fiscal policy plans during the course of the year 2012? If it poses a problem, briefly describe the problem; if it poses no problem, briefly describe why it poses no problem.
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