Question
Consider the following data for Country A and Country B: Primary Budget Surplus/GDP 2.8% & 1.5% Solvereign/Debt/GDP 90% & 60% Norminal GDP Growth Rate 2%
Consider the following data for Country A and Country B:
Primary Budget Surplus/GDP 2.8% & 1.5%
Solvereign/Debt/GDP 90% & 60%
Norminal GDP Growth Rate 2% & 4%
Norminal Interest Rate on Debt 5% & 7%
Use these data to show that the ratio of public debt to GDP is expected to stabilize in Country A but not in Country B. How might this impact monetary policy in Country B?
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Bitcoin Wallet
Authors: Lamont Zywiec
1st Edition
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