What do you think generally happens to the Debt/GDP ratio as the economy moves toward the...

What do you think generally happens to the Debt/GDP ratio as the economy moves toward the peak of a business cycle? Explain assuming that the government has not adopted discretionary fiscal policy to stimulate the economy.

Expert Solution

Rahul Sunny answered 2 years ago

what does debt to GDP ratio mean? Contrast China's debt to GDP ratio to that of...

what does debt to GDP ratio mean? Contrast China's debt to GDP ratio to that of the United States

. What is the debt to GDP ratio for the U.S. public debt for 2018? Is...

. What is the debt to GDP ratio for the U.S. public debt for 2018? Is the U.S. national debt beneficial or detrimental to the U.S. economy? Provide and explain three reasons to support your answer. Be specific.

What happens to the component costs of debt and equity when the debt ratio is increased?...

What happens to the component costs of debt and equity when the debt ratio is increased? Why does this occur? What does the MM theory with no taxes state about the value of a levered firm versus the value of an otherwise identical but unlevered firm? What does this imply about the optimal capital structure? Why does the MM theory with corporate taxes lead to 100% debt? What does the Miller model with personal and corporate taxes imply about value...

What generally happens to the cost of debt, cost of equity, and cost of capital when...

What generally happens to the cost of debt, cost of equity, and cost of capital when a firm increases Debt and holds Equity constant?

what happens to the equilibrium level of GDP if all the individuals in this experimental economy...

what happens to the equilibrium level of GDP if all the individuals in this experimental economy decide to spend less and save more? what effect does this have on the actual level of total saving in future onwards?

Much have been said about the ratio of government debt to GDP. Some say economy will...

Much have been said about the ratio of government debt to GDP. Some say economy will be in real trouble if the ratio figure exceeds the threshold level (e.g. 55%). Others do not bother about the figure as long as the government can react to its best judgement to get the economy going. (a) Discuss your opinions about the strength and weaknesses of having the threshold level for the government debt to GDP ratio. (b) Using the debt dynamics equation,...

Lets imagine you want to reduce the public debt to gdp ratio (D/Y). What is the...

Lets imagine you want to reduce the public debt to gdp ratio (D/Y). What is the best method: reducing govt. spending, increasing taxes, printing money or increasing potential output? Explain your answer

Now that you understand what GDP is and how it is calculated do you think it...

Now that you understand what GDP is and how it is calculated do you think it is a good measure of economic activity. Make sure you reference any problems you may have with Real versus Nominal GDP. Just for your information a very big discussion is currently underway concerning Real versus Nominal GDP as a target of economic policy. If any takes intermediate Macroeconomics we will spend time examining that issue.

What is the debt to GDP ratio for the US government? Is that bad? Give some...

What is the debt to GDP ratio for the US government? Is that bad? Give some arguments why it NOT necessarily a problem and other arguments about the risk of that ratio getting too high.

using the US debt clock What do YOU think about the public debt? Do you agree...

using the US debt clock What do YOU think about the public debt? Do you agree or disagree with the video? Which part and why/why not? Try to use the economic concepts you have learned from this course, and minimize any political leanings. What kinds of changes can we expect in government spending OR tax increase OR BOTH to bring the deficit down? What else can be done to bring the public debt down besides change in government spending or...

Question