Question
Consider a government with a balanced primary budget. The interest rate is 5 percent. The growth rate of nominal GDP is 2 percent. The initial
Consider a government with a balanced primary budget. The interest rate is 5 percent. The growth rate of nominal GDP is 2 percent. The initial debt-GDP ratio is 10 percent. Over time, the debt to GDP ratio will grow by:
a.5 percent.
b. 10 percent.
c.2 percent.
d.3 percent.
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Ans Wer Option D Because the ret change will ...
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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
