Consider a government with a positive stock of debt.If the growth rate of real GDP exceeds the real rate of interest on government bonds,then to keep the debt-to-GDP ratio constant the
A) government must have a primary budget deficit.
B) government must have a primary budget surplus.
C) government must implement an expansionary fiscal policy.
D) money supply should be increased at a constant rate.
E) nominal interest rate must be constant.
Correct Answer:
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