The tax revenues of the government equal t percent of GDP, and the expenditures z percent of GDP (t>z). The level of public debt-to-GDP ratio at the end of the previous period was equal to bỏ. The nominal rate of interest is i, inflation equals 7. What should be the population growth rate to make the government able to maintain the debt-to-GDP ratio at the level of bo in the long-run if the rate of technological progress is equal to x percent? Assume that the economy is in the steady state in the long-run as the Solow model predicts.

The tax revenues of the government equal t percent of GDP, and the expenditures z percent of GDP (t>z). The level of public debt-to-GDP ratio at the end of the previous period was equal to bỏ. The nominal rate of interest is i, inflation equals 7. What should be the population growth rate to make the government able to maintain the debt-to-GDP ratio at the level of bo in the long-run if the rate of technological progress is equal to x percent? Assume that the economy is in the steady state in the long-run as the Solow model predicts.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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