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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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
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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