3) Use the present value relation for debt B-1 P s! + s + EII (1+ (34+ ++ +Te+k-1 t+n to analyze the Greek economy over the last 20 years. Since Greece is part of the EMU, they don't not have control of the money supply and cannot count on seigniorage revenue, so assume si" = 0 for all t. Further assume that the real interest rate is constant ritk=F. Define De as the debt-to-GDP ratio entering period t, and de and the deficit-to-GDP ratio in time t. You can assume that GDP is constant at a steady state level. 6 a) Write a version of the present value relation with De on the left-hand side. b) At the beginning of 2010, the Greek debt-GDP-ratio was 125%. If their creditors agreed to write down 20% of their debt, in exchange for a plan of constant future surpluses that services the debt assuming F = 5%, what surplus/deficit would be required? What if = 10%? What was the actual deficit ratio in 2010? 3) Use the present value relation for debt B-1 P s! + s + EII (1+ (34+ ++ +Te+k-1 t+n to analyze the Greek economy over the last 20 years. Since Greece is part of the EMU, they don't not have control of the money supply and cannot count on seigniorage revenue, so assume si" = 0 for all t. Further assume that the real interest rate is constant ritk=F. Define De as the debt-to-GDP ratio entering period t, and de and the deficit-to-GDP ratio in time t. You can assume that GDP is constant at a steady state level. 6 a) Write a version of the present value relation with De on the left-hand side. b) At the beginning of 2010, the Greek debt-GDP-ratio was 125%. If their creditors agreed to write down 20% of their debt, in exchange for a plan of constant future surpluses that services the debt assuming F = 5%, what surplus/deficit would be required? What if = 10%? What was the actual deficit ratio in 2010