Multiple Choice
If the government runs a primary deficit in year zero of B₀,and,in year 1,decides to stabilize the debt (i.e.,prevent the deficit from rising any further) ,then in year 1 and beyond,it must run a primary surplus equal to
A) zero.
B) B₀.
C) (1 + r) B₀.
D) r)
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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