Interest Rates, Primary Surpluses, and Government Debt. The gap between taxes and spending, excluding interest on the
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Interest Rates, Primary Surpluses, and Government Debt. The gap between taxes and spending, excluding interest on the debt, is known as the primary surplus . Suppose there is $100 million of outstanding public debt. Show that a primary surplus of $10 million with an interest rate of 10 percent has the same consequence for next year’s debt level as a primary surplus of $5 million and an interest rate of 5 percent.
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Related Book For 
Macroeconomics Principles Applications And Tools
ISBN: 123885
8th Edition
Authors: Arthur OSullivan ,Steven Sheffrin ,Stephen Perez
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