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Consider the following data about government debt and deficit in a given year: ― real interest rate on government bonds = 2% - growth rate of real GDP = 2% - current debt-to-GDP ratio = 28% - primary budget deficit as a percentage of GDP = 6% Over this one-year period the debt-to-GDP ratio will have A. fallen by 6 percentage points. B. risen by 0.6 percentage points. C. remained unchanged. D. risen by 6 percentage points. E. fallen by 0.6 percentage points. The accompanying diagram shows two budget deficit functions for a hypothetical economy. Suppose the economy is at point A, the budget deficit function is Bo, and the level of potential output is $500 million. The structural budget deficit would be A. $2 million. B. $7 million. C. - $5 million. ○ D. $0. C № 006 8- A Budget Surplus/Deficit (millions of dollars) طر + မှာ B 125 250 375 0 ☑ 500 625 750 875 -3- B₁ Real GDP (millions of dollars) B Во

Consider the following data about government debt and deficit in a given year: ― real interest rate on government bonds = 2% - growth rate of real GDP = 2% - current debt-to-GDP ratio = 28% - primary budget deficit as a percentage of GDP = 6% Over this one-year period the debt-to-GDP ratio will have A. fallen by 6 percentage points. B. risen by 0.6 percentage points. C. remained unchanged. D. risen by 6 percentage points. E. fallen by 0.6 percentage points. The accompanying diagram shows two budget deficit functions for a hypothetical economy. Suppose the economy is at point A, the budget deficit function is Bo, and the level of potential output is $500 million. The structural budget deficit would be A. $2 million. B. $7 million. C. - $5 million. ○ D. $0. C № 006 8- A Budget Surplus/Deficit (millions of dollars) طر + မှာ B 125 250 375 0 ☑ 500 625 750 875 -3- B₁ Real GDP (millions of dollars) B Во

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider the following data about government debt and deficit in a given year: ― real interest rate on government bonds = 2% - growth rate of real GDP = 2% - current debt-to-GDP ratio = 28% - primary budget deficit as a percentage of GDP = 6% Over this one-year period the debt-to-GDP ratio will have A. fallen by 6 percentage points. B. risen by 0.6 percentage points. C. remained unchanged. D. risen by 6 percentage points. E. fallen by 0.6 percentage points.
Transcribed Image Text:Consider the following data about government debt and deficit in a given year: ― real interest rate on government bonds = 2% - growth rate of real GDP = 2% - current debt-to-GDP ratio = 28% - primary budget deficit as a percentage of GDP = 6% Over this one-year period the debt-to-GDP ratio will have A. fallen by 6 percentage points. B. risen by 0.6 percentage points. C. remained unchanged. D. risen by 6 percentage points. E. fallen by 0.6 percentage points.
The accompanying diagram shows two budget deficit functions for a hypothetical economy. Suppose the economy is at point A, the budget deficit function is Bo, and the level of potential output is $500 million. The structural budget deficit would be A. $2 million. B. $7 million. C. - $5 million. ○ D. $0. C № 006 8- A Budget Surplus/Deficit (millions of dollars) طر + မှာ B 125 250 375 0 ☑ 500 625 750 875 -3- B₁ Real GDP (millions of dollars) B Во
Transcribed Image Text:The accompanying diagram shows two budget deficit functions for a hypothetical economy. Suppose the economy is at point A, the budget deficit function is Bo, and the level of potential output is $500 million. The structural budget deficit would be A. $2 million. B. $7 million. C. - $5 million. ○ D. $0. C № 006 8- A Budget Surplus/Deficit (millions of dollars) طر + မှာ B 125 250 375 0 ☑ 500 625 750 875 -3- B₁ Real GDP (millions of dollars) B Во
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