Which of the following describe a No-Ponzi scheme condition? (Check all that apply.)

1. A condition that prevents continuous borrowing to pay interest without reimbursing principal
2. An investment scheme created by Ponzi
3. Transversality condition
4. A condition for solvency
5. A requirement that debt cannot grow without bounds

Give an explanation to your answer/answers

TOTAL [5 Marks]

QUESTION TWO (2)

What is another term for primary balance?

1. Most important balance
2. Overall balance
3. Non-interest balance
4. Operational balance

Give an explanation to your answer/answers

TOTAL [5 Marks]

QUESTION THREE (3)

The solvency condition is derived from the flow budget constraint by imposing the _____________ condition.

1. Intertemporal budget
2. Solvency
3. Transversality
4. Debt dynamics

TOTAL [5 Marks]