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If the Primary Budget Is Balanced Each Year,then

Question 2

Multiple Choice

If the primary budget is balanced each year,then


A) no debt/GDP ratio is sustainable, regardless of g and r
B) any debt/GDP ratio is sustainable, regardless of g and r
C) a positive debt/GDP ratio tends to infinity if r < g
D) a positive debt/GDP ratio eventually becomes negative if r > g
E) a positive debt/GDP ratio is sustainable if g = r

Correct Answer:

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