Suppose That a Country Has an Inflation Rate of About

question 139

Multiple Choice

Suppose that a country has an inflation rate of about 2 percent per year and a real growth rate of about 3 percent per year.Suppose also that it has nominal GDP of about 200 billion units of currency.It can have a deficit of just under

• A)4 billion units without raising the debt-to-income ratio.
• B)6 billion units without raising the debt-to-income ratio.
• C)10 billion units without raising the debt-to-income ratio.
• D)12 billion units without raising the debt-to-income ratio.

---

Definitions:

Cold War

A period of geopolitical tension between the Soviet Union and the United States and their respective allies, lasting from the end of World War II until the dissolution of the Soviet Union in 1991, characterized by threats, propaganda, and other measures short of open warfare.

National Security Apparatus

The collective institutions and operations aimed at protecting a country from threats and ensuring the safety of its citizens.

World Peace

is the ideal of a future state where countries coexist harmoniously without conflict and all individuals live in freedom and safety.