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In 2010 Greece was in a situation with approximately the following economic statistics: Real Interest Rates: 0.10 Real GDP growth Rate: 0.04 Unemployment: 26.5% Inflation

  1. In 2010 Greece was in a situation with approximately the following economic statistics:

Real Interest Rates: 0.10

Real GDP growth Rate: 0.04

Unemployment: 26.5%

Inflation Rate: -1.7%

Government Debt Ratio: 1.80

Government Deficit Ratio: 0.04

GDP per capita: $26,000

Population: 11.1 million

  1. Write the equation for debt ratio dynamics.
  2. Graphically demonstrate that Greece's Debt Ratio is stable or unstable.
  3. How much of a primary surplus would have Greece needed to run to achieve a stable debt ratio? (What would d need to be to obtain
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