A country is growing at 3% and has a debt/GDP ratio of 50%. Assuming no money financing, what is the primary budget deficit/surplus that keeps the debt/income ratio constant when (i) The real interest rate is 2%?(ii) The real interest rate is 5%? Your answer
A country is growing at 3% and has a debt/GDP ratio of 50%. Assuming no money financing, what is the primary budget deficit/surplus that keeps the debt/income ratio constant when (i) The real interest rate is 2%?(ii) The real interest rate is 5%? Your answer
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![A country is growing at 3% and has a debt/GDP ratio of 50%. Assuming no
money financing, what is the primary budget deficit/surplus that keeps the
debt/income ratio constant when (i) The real interest rate is 2%?(ii) The real
interest rate is 5%?
Your answer](https://content.bartleby.com/qna-images/question/a9a88693-bbaa-4403-bfcf-4fa6aea661d2/607dd828-ec8d-43b2-8187-e424aedc359d/4c7uh7h_thumbnail.jpeg)
Transcribed Image Text:A country is growing at 3% and has a debt/GDP ratio of 50%. Assuming no
money financing, what is the primary budget deficit/surplus that keeps the
debt/income ratio constant when (i) The real interest rate is 2%?(ii) The real
interest rate is 5%?
Your answer
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