By how much will the action increase overall budget deficit


Problem

Congress votes a special one-time $1 billion transfer to bail out the buggy whip industry. Tax collections don't change, and no change is planned for at least several years. By how much will this action increase the overall budget deficit and the primary deficit in the year that the transfer is made? In the next year? In the year after that? Assume that the nominal interest rate is constant at 10%.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: By how much will the action increase overall budget deficit
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