Consider a Government with an Outstanding Stock of Public Debt

Multiple Choice

Consider a government with an outstanding stock of public debt.If,in any given year,the government has a primary budget surplus and the real interest rate on government bonds is more than the growth rate of real GDP,then

A) the debt-to-GDP ratio will certainly fall.
B) debt-service payments will be eliminated.
C) the debt-to-GDP ratio is certainly negative.
D) the debt-to-GDP ratio will certainly rise.
E) the effect on the debt-to-GDP ratio is uncertain.