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

In the year 2015,

$Federalbudgetreceipts=\$3,829.8$

$Federalbudgetspending=\$4,382.6$

$GDP=\$15,573.2$

Calculating the budget deficit:-

$BudgetDeficit=FederalBudgetSpending-FederalBudgetReceipt$

$BudgetDeficit=\$4,382.6-\$3,829.8$

$BudgetDeficit=\$552.8$

Calculating the budget deficit as percentage of GDP:-

role="math" localid="1651583575267" $BudgetDeficitaspercentageofGDP=\frac{Budgetdeficit}{GDP}\times 100$

role="math" localid="1651584084850" $BudgetDeficitaspercentageofGDP=\frac{\$552.8}{\$15,573.2}\times 100$

$BudgetDeficitaspercentageofGDP=3.55percent$

In the year 2016,

$Federalbudgetreceipts=\$3,892.4$

$Federalbudgetspending=\$4,441.6$

$GDP=\$16,316.0$

$BudgetDeficit=FederalBudgetSpending-FederalBudgetReceipt$

$BudgetDeficit=\$4,441.6-\$3,892.4$

$BudgetDeficit=\$549.2$

Calculating the budget deficit as percentage of GDP:-

$BudgetDeficitaspercentageofGDP=\frac{Budgetdeficit}{GDP}\times 100$

$BudgetDeficitaspercentageofGDP=\frac{\$549.2}{\$16,316.0}\times 100$

role="math" localid="1651584228109" $BudgetDeficitaspercentageofGDP=3.37percent$

In the year 2017,

$FederalBedgetreceipts=\$3,964.2$

role="math" $FederalBedgetSpending=\$4,529.3$

$GDP=\$16,852.1$

$BudgetDeficit=FederalBudgetSpending-FederalBudgetReceipt$

$BudgetDeficit=\$4,529.3-\$3,964.2$

$BudgetDeficit=\$565.1$

Calculating the budget deficit as percentage of GDP:-

$BudgetDeficitaspercentageofGDP=\frac{Budgetdeficit}{GDP}\times 100$

$BudgetDeficitaspercentageofGDP=\frac{\$565.1}{\$16,852.1}\times 100$

$BudgetDeficitaspercentageofGDP=3.35percent$

In the year 2018,

$FederalBudgetreceipts=\$4,013.5$

$FederalBudgetSpending=\$4.600.1$

$GDP=\$17,454.4$

$BudgetDeficit=FederalBudgetSpending-FederalBudgetReceipt$

$Budgetdeficit=\$4,600.1-\$4,013.5$
$Budgetdeficit=\$586.6$

Calculating the budget deficit as percentage of GDP:-

$BudgetDeficitaspercentageofGDP=\frac{Budgetdeficit}{GDP}\times 100$

$BudgetDeficitaspercentageofGDP=\frac{\$586.6}{\$17,454.4}\times 100$

$BudgetDeficitaspercentageofGDP=3.36percent$