If the primary budget is balanced each year,then A) no debt/GDP ratio is sustainable, regardless of g and r B) any debt/GDP ratio is sustainable, regardless of g and r C) a positive debt/GDP ratio tends to infinity if r g E) a positive debt/GDP ratio is sustainable if g = r

Question

If the primary budget is balanced each year,then
A) no debt/GDP ratio is sustainable, regardless of g and r
B) any debt/GDP ratio is sustainable, regardless of g and r
C) a positive debt/GDP ratio tends to infinity if r < g
D) a positive debt/GDP ratio eventually becomes negative if r > g
E) a positive debt/GDP ratio is sustainable if g = r

Quizplus · Accepted Answer

The Answer is E

If the Primary Budget Is Balanced Each Year,then