Question

Suppose that the Office of Management and Budget provides the accompanying estimates of federal budget​ receipts, federal budget​ spending, and​ GDP, all expressed in billions of dollars. Calculate the implied estimates of the federal budget deficit as a percentage of GDP for each year.

​(Enter

each response as a percentage rounded to one decimal place. Do not include a plus or minus​ sign.)

Year	Federal Budget Receipts ​(11​% growth​)	Federal Budget Spending ​(66​% growth​)	GDP ​(33​% growth​)	Deficit as a​ % of GDP
2015	​$2,329.8	​2,682.6	​14,573.2	​%
2016	2,353.1	2,843.6	15,010.4	​%
2017	2,376.6	3,014.2	15,460.7	​%
2018	2,400.4	3,195.0	15,924.5	​%

Answer 1

A country has a deficit when budget spending is more than budget receipts.

Deficit = Budget receipts - Budget spending

Deficit as a % of GDP = (Deficit / GDP) * 100

By using the above formulas we can fill the below table:

For example:

In 2015, deficit is $352.80 i.e. ($2329.80 - $2682.60).

Deficit as a % of GDP = (352.80 / 14573.20) * 100 = 2.4%

In a similar manner, we can calculate all the remaining values.