Consider the Following Variables,defined as Follows: D = Debt-To-GDP Ratio

question 5

Multiple Choice

Consider the following variables,defined as follows: d = debt-to-GDP ratio
X = primary budget deficit as a percentage of GDP
R = real interest rate on government bonds
G = growth rate of real GDP
Which of the following expressions correctly describes the change in the debt-to-GDP ratio?

• A)Δd = x + (r - g)+ d
• B)Δd = x + (r - g)× d
• C)Δd = x(r - g)+ d
• D)Δd = x(g - r)- d
• E)Δd = x + (g - r)× d

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