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guajiro [1.7K]
3 years ago
12

Suppose that we have the following information concerning the government's finances and the macroeconomy for a given year: Gover

nment Debt: $12 trillion Inflation: 10% Nominal Deficit: $1.5 trillion What is the real deficit for the year
Business
1 answer:
tresset_1 [31]3 years ago
3 0

Answer: $300 billion

Explanation:

The real deficit that a Government has is one that has been adjusted for inflationary effects. It is calculated by subtracting the inflation rate times the total debt from the nominal deficit.

= Nominal deficit - (Inflation rate * Total debt)

= 1.5 trillion - ( 10% * 12 trillion)

= 1.5 trillion - 1.2 trillion

= $300 billion

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