1. Conduct an Internet search on the \"national debt to the penny.\" How much is
ID: 1136627 • Letter: 1
Question
1. Conduct an Internet search on the "national debt to the penny." How much is the current national debt? Once you find out the size of the debt, determine if the federal government is helped or hurt by unanticipated inflation if the interest rate on the debt and its payments are fixed. Explain.
2. Maddie's nominal income was $33,000 in 2012. In 2013, because of her excellent work ethic, she received a raise that increased her nominal income to $35,000. Maddie knew a lot about inflation so she decided to see how much of a raise she really received. After researching the consumer price index at the Bureau of Labor Statistics web site, she found that the CPI for 2012 was 110 and that it jumped to 125 in 2013. Calculate the percent change in Maddie's real income after she was given a raise. Was she hurt or helped by this unanticipated inflation? Explain.
Explanation / Answer
1. At the end of FY 2018 the gross US federal government debt is estimated to be$21.48 trillion
The government is helped by inflation with regard to the debt since it will get increased tax revenues as a result of inflation, however the amount of interest and principal on the bonds will remain the same. Also, inflation will cause people to demand higher interest on bonds and the government will have to pay more for borrowing money.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.