In 2004, The DEBTLAND's debt-GDP ratio was 0.7, and in 2005, the government primary deficit to GDP ratio is -0.2. If the interest rate paid on debt is 4 percent and the economy grow by 4 percent in 2005, the DEBTLAND's debt-DGP ratio in 2005 will
A) increase by 20 percent.
B) decrease by 20 percent.
C) increase by 4 percent.
D) not change.
Correct Answer:
Verified
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