If government debt is not changing, then:
A) the economy is at long-run equilibrium.
B) the government's budget must be balanced.
C) GDP must equal the natural rate of output.
D) capital per worker is constant.

Question

Quizplus · Accepted Answer

When government debt is not changing, it means that the government is not borrowing more money than it is repaying, which implies that its budget is balanced. The other options do not necessarily follow from the condition of unchanged government debt.

If Government Debt Is Not Changing, Then