The "Allowable Deficit" That Causes No Change in the Debt-GDP

question 18

Multiple Choice

The "allowable deficit" that causes no change in the debt-GDP ratio is equal to the ________ times ________.

• A)interest rate,outstanding national debt
• B)interest rate,nominal GDP
• C)rate of nominal GDP growth,outstanding national debt
• D)rate of nominal GDP growth,nominal GDP

---

Definitions:

Foreign Producer

A company that produces goods or provides services in a country other than the one where the company is based.

Balance of Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to more money leaving the country than coming in.

Exports Fewer

A situation where a country sells fewer goods or services abroad than in previous periods.

Price of Rice

The current market cost at which rice is sold, influenced by factors like supply and demand, production costs, and governmental policies.