« previous next »

Author Question: What are the factors that will determine the size of some future required tax increase to pay off ... (Read 49 times)

bcretired

  • Hero Member
  • *****
  • Posts: 525
on: Jun 30, 2018
What are the factors that will determine the size of some future required tax increase to pay off all debt?
 
  What will be an ideal response?

Question 2

Explain what can occur to cause an increase in the debt ratio.
 
  What will be an ideal response?


af

  • Sr. Member
  • ****
  • Posts: 356
Reply #1 on: Jun 30, 2018
Answer to Question 1

The factors will include: the size of the debt at that time, how long it will take to pay off the debt, and the interest rate on the existing debt.

Answer to Question 2

The debt ratio is simply the ratio of the stock of debt to GDP. So, the debt ratio will rise whenever the increase in debt is greater than the increase in GDP. Even if the primary deficit is zero, the debt ratio will increase if the interest payments on the existing debt are such that they more than offset the fact that the economy is growing. So, a comparison of the real interest rate and growth rate of GDP will be important. Also, the debt ratio will rise if the primary deficit exists (or increases).


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

bcretired

  • Hero Member
  • *****
  • Posts: 525
Reply #2 on: Jun 30, 2018
Thank you


af

  • Sr. Member
  • ****
  • Posts: 356
Reply #3 on: Jun 30, 2018
No problemo


« previous next »
 

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

The B-complex vitamins and vitamin C are not stored in the body and must be replaced each day.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Influence of abiotic factors on competition between T. castaneum and T. confusum. Influence of abiotic factors on competition between T. castaneum and T. confusum.
Detritivores are often classified according to their body size as microflora, microfauna, mesofauna, Detritivores are often classified according to their body size as microflora, microfauna, mesofauna,
Estimating cicada population size and predation rates by birds. Estimating cicada population size and predation rates by birds.
Tubal ligation. To minimize the size of the incisions necessary, laparoscopic surgery may be used to Tubal ligation. To minimize the size of the incisions necessary, laparoscopic surgery may be used to
Relative Ventricular Size in Chronic Schizophrenics and Controls Relative Ventricular Size in Chronic Schizophrenics and Controls
Hormonal and nervous factors influencing blood pressure Hormonal and nervous factors influencing blood pressure
Video: What is Reverse Osmosis?

For a complete list of videos, visit our video library