All Else Constant,if the Interest Rate Paid on Government Debt

question 84

Multiple Choice

All else constant,if the interest rate paid on government debt falls short of the GDP growth rate,

• A)the debt-GDP ratio will rise from one year to the next.
• B)the debt-GDP ratio will fall from one year to the next.
• C)the debt-GDP ratio will remain unchanged from one year to the next.
• D)the debt will rise more than the GDP growth rate from one year to the next.

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