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 100 billion units of currency. What is the highest possible deficit it can have without raising the debt-to-income ratio?
A) just under 3 billion units
B) just under 5 billion units
C) just under 8 billion units
D) just under 15 billion units
Correct Answer:
Verified
Correct Answer:
Verified
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