Question

Inflation is 14 percent. Debt is $4 trillion. The nominal deficit is $360 billion. What is the real deficit or surplus

Answer 1

Real Surplus is $200 billion

Step-by-step explanation:

Inflation = 14%

Debt = $4 trillion = $4,000 billion

Nominal deficit = $360 billion

Real Deficit = Nominal deficit - (Inflation*Debt)

= $360 - 14% * 4,000

= $360 - 560

= -$200

Hence, the answer is Real Surplus of $200 billion