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Question 4: In the US, public debt as a share of GDP stands at 50% while average interest rate on public debt is 4%. The
Question 4: In the US, public debt as a share of GDP stands at 50% while average interest rate on public debt is 4%. The government budget is in primary balance. a. What is the budget deficit as % of GDP? b. What should be the economic growth rate if the fiscal path of the US government is to be sustainable? c. If the US is expected to grow by 1% next year, how much primary surplus would it have run to keep the ration of public debt to GDP stable
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