Table 15.3 Cordelia Saldinia $$\begin{array} { | l | r | r | } \hline \text { Debt-to-cDP ratio } & 172 \% & 65 \% \ \hline \text { Average annual ecanmaic growth } & & \ \text { unt } & 4.7 \% & 3.2 \% \ \hline \text { Average influtim rate } & 6.3 \% & - 0.3 \% \ \hline \text { Average nominal interest rate } & 2.5 \% & 4.6 \% \ \hline \end{array}$$ The above table contains data for the nations of Cordelia and Saldinia for 2012. Assume seigniorage is zero. -Refer to Table 15.3.Based on the data in the table,fiscal policy in Cordelia is ________ and fiscal policy in Saldinia is ________.

Question

Quizplus · Accepted Answer

Fiscal policy in Cordelia is sustainable because the debt-to-GDP ratio is falling and the average annual economic growth rate is higher than the average inflation rate. Fiscal policy in Saldinia is unsustainable because the debt-to-GDP ratio is rising and the average annual economic growth rate is lower than the average inflation rate.

Table 153 Cordelia Saldinia The Above Table Contains Data for the Nations of Cordelia

Table 153
Cordelia Saldinia The Above Table Contains Data for the Nations of Cordelia