Suppose the Real Rate of Interest Is 3% and the Growth

Multiple Choice

Suppose the real rate of interest is 3% and the growth rate of real GDP is 1%.If the government has a positive stock of outstanding debt and its goal is to hold the debt-to-GDP ratio constant at its current level,then it

A) must run a cyclically balanced budget.
B) must run an annually balanced budget.
C) must run a primary budget deficit.
D) must run a primary budget surplus.
E) must eliminate the overall deficit.