Multiple Choice
A higher deficit in the current year will lead to increased debt in the future only if:
A) the deficit is greater than the previous year's deficit.
B) future primary surpluses are less than the interest payment.
C) it causes an increase in private saving.
D) the deficit- to- GDP ratio is greater than the debt- to- GDP ratio.
E) it causes a fall in private saving.
Correct Answer:

Verified
Correct Answer:
Verified
Q14: What is a haircut?<br>A) The private sector
Q15: Which of the following is common to
Q16: The primary deficit is represented by which
Q17: In the medium run, a fiscal contraction
Q18: If the Ricardian equivalence proposition is correct,
Q20: To reduce distortions in the economy, it
Q21: If the Ricardian equivalence proposition is correct,
Q22: If the government runs a primary deficit
Q23: The correct measure of the deficit is
Q24: Explain what is meant by debt monetisation.