Economists Who Claim That a Stable or Falling Debt- To-

question 5

Multiple Choice

Economists who claim that a stable or falling debt- to- GDP ratio is the best indicator of fiscal prudence support the view that

• A)for many economies, the public debt can safely be allowed to grow at a rate up to the growth rate of real GDP.
• B)budget deficits can grow at every phase of the business cycle.
• C)the Bank of Canada must maintain the interest rate above the rate of growth on real GDP.
• D)the public debt must be paid off at a rate equal to the interest rate times the growth rate on real GDP.
• E)surpluses must be run only at the recessionary phase of the business cycle.