Suppose That a Country Has an Inflation Rate of About

question 75

Multiple Choice

Suppose that a country has an inflation rate of about 3 percent per year and a real growth rate of about 5 percent per year.Suppose also that it has nominal GDP of about 200 billion units of currency.What is the highest possible deficit it can have without raising the debt-to-income ratio?

• A) just under 1 billion units
• B) just under 9 billion units
• C) just under 12 billion units
• D) just under 16 billion units

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Definitions:

Government Procurement Contract

An agreement between the government and a private company for the provision of goods and services to the government.

Adequate Funding

Sufficient financial resources allocated to support a project, initiative, or organization.

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An online platform that aggregates a wide variety of products from different suppliers, allowing consumers to compare and purchase items in one place.

Favorable Tax Treatment

Tax policies or regulations that provide benefits or reductions in tax liabilities for certain activities or investments.