Problem
Find the largest nominal deficit that the government can run without raising the debt-GDP ratio, under each of the following sets of assumptions:
a. Nominal GDP growth is 10% and outstanding nominal debt is 1000.
b. Real GDP is 5,000 and remains constant, nominal GDP is initially 10,000, inflation is 5%, and the debt-GDP ratio is 0.6.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.