If a Country Had a Rule That Required the Ratio

question 80

Multiple Choice

If a country had a rule that required the ratio of debt to GDP to be constant, it would necessarily have to run a surplus if

• A)real GDP rose and the inflation rate were positive.
• B)real GDP rose and the inflation rate were negative.
• C)real GDP fell and the inflation rate were positive.
• D)real GDP fell and the inflation rate were negative.

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Definitions:

Corporate Charter

A corporate charter is a legal document that establishes a corporation, setting forth its structure, powers, and objectives as granted by the state.

Issue Price

The price at which new shares, bonds, or other securities are offered to the public or the holders.

Cash Dividend

A payment of profits by a company to its shareholders in the form of cash, typically issued on a quarterly basis.

Liability

A financial obligation or debt owed by a business to another entity.