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Public Debt Because increased government spending or tax cuts cause higher government deficits, they also contribute to a rise in total planned expenditures and aggregate demand. Tasks: Explain how each of the following will affect the net public debt, other things being equal: Previously, the government operated with a balanced budget; however, recently, there has been a sudden increase in federal tax collections. The federal government had been operating with a very small annual budget deficit until three successive hurricanes hit the Atlantic Coast, and now government spending has risen substantially. The Government National Mortgage Association, a federal government agency that purchases specific types of home mortgages, buys U.S. Treasury bonds from another government agency. Remember to adhere to APA guidelines, standards, and formatting. Submission Requirements: Submit the analysis for grading in approximately two pages before the end of the week. Format: Microsoft Word Font: Arial, 12-point, double-spaced .

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