If the economy is growing 5% a year and GDP is $1000 billion,the additional revenues available to meet interest payments on the government deficit would be,ceteris paribus,

Question

Quizplus · Accepted Answer

The additional revenues would be 5% of $1000 billion, which is $50 billion. This is because a 5% growth rate on a GDP of $1000 billion results in an increase of $50 billion in the economy, potentially available for various purposes including meeting interest payments.

If the Economy Is Growing 5% a Year and GDP