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Consider an Economy with an Annual GDP of $5 Trillion

Question 141

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Consider an economy with an annual GDP of $5 trillion that is growing at a real rate of 3% per year,and has a government debt of $3 trillion.
(a)What is this economy's relative debt burden?
(b)How much of a deficit can this economy's government have each year and still maintain its current relative debt burden?

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(a)The relative debt burden is measured ...

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