 Business
8 March, 07:06

# Calculate the real deficit or surplus in the following cases: a. Inflation is 11 percent. Debt is \$1 trillion. Nominal deficit is \$90 billion. Instructions: Round your answer to the nearest whole dollar amount. \$ billion. b. Inflation is 11 percent. Debt is \$1 trillion. Nominal deficit is \$150 billion. Instructions: Round your answer to the nearest whole dollar amount. \$ billion. c. Inflation is - 5 percent. (Price levels are falling.) Debt is \$300 billion. Nominal deficit is \$40 billion. Instructions: Round your answer to the nearest whole dollar amount. \$ billion. d. Inflation is 1 percent. Debt is \$3 trillion. Nominal surplus is \$50 billion. Instructions: Round your answer to the nearest whole dollar amount. \$ billion.

0
1. 8 March, 07:37
0
The computation is shown below:

As we know that

Real Deficit = Nominal Deficit - (Inflation * Total Debt)

a.

Real deficit = \$90 - (11% * \$1,000)

= - \$20 billion surplus

b.

Real deficit = \$150 - (11% * \$1,000)

= \$40 billion deficit

c.

Real deficit = \$40 - (-5% * \$300)

= \$55 billion deficit

d.

Real deficit = - \$50 - (1% * \$3,000)

= - \$80 billion surplus