If the Government Runs a Primary Deficit in Year Zero

Multiple Choice

If the government runs a primary deficit in year zero of B₀,and decides to repay it in year t (i.e.,bring the debt back down to its pre-existing level) ,then in year t it must run a primary surplus equal to

A) zero.
B) one.
C) B₀.
D) B₀(1 + r) .
E) none of the above