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Questions 4 refers to the following information: Consider an economy such that at the beginning of this year the debt-income ratio is 80 per cent.
Questions 4 refers to the following information: Consider an economy such that at the beginning of this year the debt-income ratio is 80 per cent. The Treasury expects the following numerical values of the relevant economic indicators at the end of this year: '3' Primary budget showing a deficit of 20 per cent of GDP; Nominal interest rate 2.5 per cent, (o e Ination rate 5 per cent, and 9 Real GDP growth 4per cent, From the preceding information, it follows that A. The debt-income ratio will decrease B. The economy is on the steady-state path C. The debt-income ratio will remain constant D. The debt-income ratio will increase E. Not enough information is supplied to provide an
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