Question
The scaleof Joe Biden's plans is hard to exaggerate. Where the American president's former boss, Barack Obama, pivoted quickly to deficit-cutting after the trials of
The scaleof Joe Biden's plans is hard to exaggerate. Where the American president's former boss, Barack Obama, pivoted quickly to deficit-cutting after the trials of the global financial crisis, Mr Biden's first budget, which he unveiled on May 28th, will borrow unapologetically. The plans assume that annual fiscal deficits will exceed 4% ofgdpthrough to the end of the decade; net public debt will rise to 117% ofgdpin 2030 from 110% today. The largesse raises two big questions. One is whether, coming on top of past stimulus packages, it will contribute to an overheating of America's economy in the short term. The other important question is whether in the longer term America can prudently afford to loosen the purse-strings for a sustained period. As crisis has hit and interest rates have fallen, politicians have felt more able to run up debts than in the past. But the issue of whether and when limits to borrowing might apply still remains. Recent research casts light on these constraints.
Refer to the first paragraph.US GDP in 2020 is about 21 Trillion USD.Assume "today" refers to 2020.If US nominal GDP increases by 3 percent per year for the next 10 years, what would be the nominal amount of US debt in 2030?(start calculation in 2021, so you have 10 years).Try to give as precise an answer as possible, but round to trillions of USD.Give the answer in trillions.
compute compound interest.
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