If the Government Runs a Primary Deficit in Year Zero

question 1

Multiple Choice

If the government runs a primary deficit in year zero of B₀,and decides to repay it in year t (i.e.,bring the debt back down to its pre-existing level) ,then in year t it must run a primary surplus equal to

• A)zero.
• B)one.
• C)B₀.
• D)B₀(1 + r).
• E) none of the above

---

Definitions:

Yea-Sayers

Individuals who tend to agree with or affirm propositions without significant criticism or skepticism, often to maintain harmony or avoid conflict.

Sensory Information

Data received by the senses (sight, hearing, touch, taste, and smell) that is then processed by the brain.

Brain Organizes

The process by which the brain structures and arranges information and sensory inputs to make sense of the world.

Sensory Nerves

Nerves that transmit sensory information from the body's periphery towards the central nervous system, allowing for the perception of stimuli.