(a) According to data from the Office of National Statistics, in January 2022 the UK public sector spent less than it received in taxes resulting in a primary surplus. Considering that the UK government was previously running a deficit, and assuming that UK GDP growth is higher than the real interest rate paid on the debt, use a phase line to show how the surplus may affect debt accumulation in the UK.
(a) According to data from the Office of National Statistics, in January 2022 the UK public sector spent less than it received in taxes resulting in a primary surplus. Considering that the UK government was previously running a deficit, and assuming that UK GDP growth is higher than the real interest rate paid on the debt, use a phase line to show how the surplus may affect debt accumulation in the UK.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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