Find the largest nominal deficit that the government can run without raising the debt-GDP ratio, under each

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Find the largest nominal deficit that the government can run without raising the debt-GDP ratio, under each of the following sets of assumptions:

a. Suppose that real GDP is 20,000 and remains constant, nominal GDP is initially 30,000 , inflation is $4 \%$, and the debt-GDP ratio is 1.2 .

b. Suppose that nominal GDP growth is $5 \%$ and outstanding nominal debt is 1500 .

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Macroeconomics

ISBN: 9780134167398

9th Edition

Authors: Andrew B. Abel, Ben Bernanke, Dean Croushore

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Question Posted: Apr 30, 2024 01:02 AM

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Find the largest nominal deficit that the government can run without raising the debt-GDP ratio, under each

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Macroeconomics

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