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Year 3 The newly elected government has so far failed to live up to expectations. The early signs of promise have been replaced by

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Year 3 The newly elected government has so far failed to live up to expectations. The early signs of promise have been replaced by some signs of frustration for both businesses and consumers. After last year's rapid world economic growth, the global economy is still doing well, but is beginning to slow down. This year world economic growth is expected to be 2.0%. Econland Consumer Confidence Index is 107. What should be year 3 interest rate if year 2 interest rate was 2%? What should be year 3 income tax rate if year 2 income tax rate was 16%? What should be year 3 corporate tax rate if year 2 corporate tax rate was 27%? What should be year 3 government expenditure if year 2 government expenditure was 40 billion? YEAR 2 Real GDP and Its Components: Consumption 78.5 Government Expenditure 45.0 Investment 16.4 Exports 27.0 Imports 34.7 Nominal GDP 132.2 Real GDP 121.5 YEAR 2 OTHER MACROECONOMIC DATA: Capital Stock US$ (in billions) 110.8 Productivity Growth % 3.9 Consumer Price Index 108.8 Exchange Rate Index 97.3 Trade Balance US$ (in billions) -7.7 Income Tax Revenue US$ (in billions) 21.1 Corporate Tax Revenue US$ (in billions) 3.6 Government Budget Surplus (Deficit) US$ (in billions) -20.3 Government Debt US$ (in billions) 89.0 Government Debt as % of GDP 67.3 YEAR 2 Economic Environment, Decisions, and Results Global Economic Growth Forecast 2.8 Consumer Confidence Index 102.3 Interest Rate % 2.0 Income Tax Rate % 16.0 Corporate Tax Rate % 27.0 Government Expenditure US$ (in billions) 45.0 Real GDP Growth % 5.8 Unemployment Rate % 2.0 Inflation Rate % 7.8 Budget Surplus (Deficit) as % of GDP -15.3

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