Refer to the table to answer two questions. Changes in Real GDP Growth When the GDP growth rate decreases by one percentage point 1. Government spending (G) automatically increases for Unemployment insurance benefits Food stamps. Welfare benefits Social Security benefits. Medicaid 2. Government tax revenues (T) automatically decline for Individual income taxes. Corporate income taxes. Social Security payroll taxes. 3. The deficit increases by $67 billion. Changes in Inflation When the inflation rate increases by one percentage point 1. Government spending (G) automatically increases for Indexed retirement and Social Security benefits Higher interest payments 2. Government tax revenues (T) automatically increase for Corporate income taxes Social Security payroll taxes. 3. The deficit increases by $40 billion. 14 What would happen to the budget deficit if the Instructions: Enter your responses as a whole number. a. GDP growth rate jumped from 2 percent to 4 percent? The budget deficit would [(Click to select) by $1 b. inflation rate increased by two percentage points? The budget deficit would (Click to select) by $ billion. billion.

Refer to the table to answer two questions. Changes in Real GDP Growth When the GDP growth rate decreases by one percentage point 1. Government spending (G) automatically increases for Unemployment insurance benefits Food stamps. Welfare benefits Social Security benefits. Medicaid 2. Government tax revenues (T) automatically decline for Individual income taxes. Corporate income taxes. Social Security payroll taxes. 3. The deficit increases by $67 billion. Changes in Inflation When the inflation rate increases by one percentage point 1. Government spending (G) automatically increases for Indexed retirement and Social Security benefits Higher interest payments 2. Government tax revenues (T) automatically increase for Corporate income taxes Social Security payroll taxes. 3. The deficit increases by $40 billion. 14 What would happen to the budget deficit if the Instructions: Enter your responses as a whole number. a. GDP growth rate jumped from 2 percent to 4 percent? The budget deficit would [(Click to select) by $1 b. inflation rate increased by two percentage points? The budget deficit would (Click to select) by $ billion. billion.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter4: The Aggregate Economy

Section: Chapter Questions

Problem 8E

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