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6 8- Budget Surplus/Deficit (millions of dollars) 1 2 3 + +3 ¿ N A B 0 125 250 375 500 625 750 875 Bo B₁ Real GDP (millions of dollars) O a 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.

6 8- Budget Surplus/Deficit (millions of dollars) 1 2 3 + +3 ¿ N A B 0 125 250 375 500 625 750 875 Bo B₁ Real GDP (millions of dollars) O a 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.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter31: The Impacts Of Government Borrowing
Section: Chapter Questions
Problem 14RQ: What are some fiscal policies for improving the technologies that the economy will have to draw upon...
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6 8- Budget Surplus/Deficit (millions of dollars) 1 2 3 + +3 ¿ N A B 0 125 250 375 500 625 750 875 Bo B₁ Real GDP (millions of dollars) O a
Transcribed Image Text:6 8- Budget Surplus/Deficit (millions of dollars) 1 2 3 + +3 ¿ N A B 0 125 250 375 500 625 750 875 Bo B₁ Real GDP (millions of dollars) O a
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.
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