Which of the following, regarding debt and growth, is false? a. If there is no (nominal) GDP growth, the debt/GDP ratio can only be reduced through fiscal surplus. b. Furman and Summers argue that the debt/GDP ratio is a misleading measure of a country's debt burden in an era of low interest rates. c. The burden of a dollar borrowed by the government today decreases over time—relative to GDP—if the interest rate on government debt is larger than the nominal economic growth rate. d. Blanchard and Leigh found that, following the Great Recession, countries that enacted fiscal austerity had less economic growth than they expected, and vice- versa
Which of the following, regarding debt and growth, is false? a. If there is no (nominal) GDP growth, the debt/GDP ratio can only be reduced through fiscal surplus. b. Furman and Summers argue that the debt/GDP ratio is a misleading measure of a country's debt burden in an era of low interest rates. c. The burden of a dollar borrowed by the government today decreases over time—relative to GDP—if the interest rate on government debt is larger than the nominal economic growth rate. d. Blanchard and Leigh found that, following the Great Recession, countries that enacted fiscal austerity had less economic growth than they expected, and vice- versa
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Which of the following, regarding debt and growth, is false?
a. If there is no (nominal)
through fiscal surplus.
b. Furman and Summers argue that the debt/GDP ratio is a misleading measure of
a country's debt burden in an era of low interest rates.
c. The burden of a dollar borrowed by the government today decreases over
time—relative to GDP—if the interest rate on government debt is larger than the
nominal
d. Blanchard and Leigh found that, following the Great Recession, countries that
enacted fiscal austerity had less economic growth than they expected, and vice- versa
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education