Suppose That Real GDP Is 10,000 and Remains Constant,nominal GDP

question 3

Essay

Suppose that real GDP is 10,000 and remains constant,nominal GDP is initially 30,000,inflation is 3%,and the debt-GDP ratio is 0.7.Find the largest nominal deficit that the government can run without raising the debt-GDP ratio.

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Definitions:

Survive

To continue living or existing, especially in spite of danger or hardship.

Financial Security

The condition of having stable income or resources to support a standard of living now and in the foreseeable future.

Intimacy

A close, familiar, and usually affectionate or loving personal relationship with another person or group.