A country has a rate of growth (g) of 0.75 %, a debt-to-income of 94% and a primary deficit of 0.9% of output. In response to a stimulus package, the debt-to- income ratio rises to 104% which causes an increase in the interest rate from 2.9% to 7.9%The impact to the change in the debt ratio over time is % (Enter your response rounded to two decimal places.)

A country has a rate of growth (g) of 0.75 %, a debt-to-income of 94% and a primary deficit of 0.9% of output. In response to a stimulus package, the debt-to- income ratio rises to 104% which causes an increase in the interest rate from 2.9% to 7.9%The impact to the change in the debt ratio over time is % (Enter your response rounded to two decimal places.)

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Six Debates Over Macroeconomic Policy

Section18.5: Should The Government Balance Its Budget?

Problem 5QQ

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