Suppose that the country of aquiline has an inflation rate


Suppose that the country of aquiline has an inflation rate of about 2% per year and a real growth rate of about 3 % per year. Suppose also that it has nomial gdp of about 400 billion units of currency and current nomial national debt of 200 billion units of domestic currency. Which of the following government spending and taxation figures will keep the debt to income ratio constant?

a. government spending equal to 30 billion units and tax collections equal to 25 billion units

b. same as above equal to 20 billion units

c. same as above equal to 10 billion units

d. same as above equal to 5 billion units

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Business Economics: Suppose that the country of aquiline has an inflation rate
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