Calculate the real deficit or surplus in the following cases: Inflation is 14 pe

Question

Calculate the real deficit or surplus in the following cases: Inflation is 14 percent. Debt is $4 trillion. Nominal deficit is $540 billion. Instructions: Round your answer to the nearest whole dollar amount. Inflation is 14 percent. Debt is $4 trillion. Nominal deficit is $620 billion. Instructions: Round your answer to the nearest whole dollar amount. Inflation is -8 percent. (Price levels are falling.) Debt is $450 billion. Nominal deficit is $70 billion. Instructions: Round your answer to the nearest whole dollar amount. Inflation is 4 percent. Debt is $6 trillion. Nominal surplus is $200 billion. Instructions: Round your answer to the nearest whole dollar amount.

Explanation / Answer

a. Real deficit = B/P i.e. Nominal Deficit/ Inflation rate = 540/14 = 38.57 and suplus = 4000-38 = 3962

b. Real deficit = B/P i.e. Nominal Deficit/ Inflation rate = 620/14 = 44.28 and suplus = 4000-44 = 3956

c. 560(70*8) deficit = 110 (560-450)

d. Real deficit = 50 billion Defict = 6000-50 = 5950 billion

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