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Imagine that in a given economy the government chooses to run a primary deficit equal to 5% of the GDP. Furthermore, assume that the interest

Imagine that in a given economy the government chooses to run a primary deficit equal to 5% of the GDP. Furthermore, assume that the interest rate is equal to 2% and that the GDP is expected to grow at 3%. In such an economy the debt to the GDP ratio O will converge to 0 will explode will stabilize at 500% None of the above

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