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Consider a government dynamic budget constraint in debt to GDP terms. a) Why is the stability of this equation a matter of concern? b) How

Consider a government dynamic budget constraint in debt to GDP terms.

a) Why is the stability of this equation a matter of concern?

b) How do rating agencies affect the equation and its stability?

c) This approach maintains that the government budget constraint is effectively comparable to that of a household. What insight do we gain from such a comparison and what are its limitations?

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