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Calculate the Real Deficit from the Figures in the Examples

Question 150

Essay

Calculate the real deficit from the figures in the examples given below:
#1: Nominal deficit = $8 million;Inflation = 5%;Total debt = $100 million
#2: Nominal deficit = $8 million;Inflation = 8%;Total debt = $100 million
#3: Nominal deficit = $8 million;Inflation = 8%;Total debt = $200 million

Correct Answer:

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Real deficit = Nominal deficit - (Inflat...

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