Consider the following variables,defined as follows: d = debt-to-GDP ratio
X = primary budget deficit as a percentage of GDP
R = real interest rate on government bonds
G = growth rate of real GDP
Which of the following expressions correctly describes the change in the debt-to-GDP ratio?
A) Δd = x + (r - g) + d
B) Δd = x + (r - g) × d
C) Δd = x(r - g) + d
D) Δd = x(g - r) - d
E) Δd = x + (g - r) × d
Correct Answer:
Verified
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