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Suppose real GDP is constant. If the government's fiscal policy objective is to reduce the outstanding public debt, the government must: Oa. Have a structural primary budget surplus that is larger than its interest payments on the public debt O b. None of the answers is correct Have a structural budget surplus equal to the outstanding public debt O d. Sell new bonds in the open market

Suppose real GDP is constant. If the government's fiscal policy objective is to reduce the outstanding public debt, the government must: Oa. Have a structural primary budget surplus that is larger than its interest payments on the public debt O b. None of the answers is correct Have a structural budget surplus equal to the outstanding public debt O d. Sell new bonds in the open market

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter30: Government Budgets And Fiscal Policy
Section: Chapter Questions
Problem 51P: A government starts off with a total debt of $3.5 billion. In year one, the government runs a...
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Suppose real GDP is constant. If the government's fiscal policy objective is to reduce the outstanding public debt, the government must: Have a structural primary budget surplus that is larger than its interest payments on the public debt O b. None of the answers is correct Oc Have a structural budget surplus equal to the outstanding public debt O d. Sell new bonds in the open market
Transcribed Image Text:Suppose real GDP is constant. If the government's fiscal policy objective is to reduce the outstanding public debt, the government must: Have a structural primary budget surplus that is larger than its interest payments on the public debt O b. None of the answers is correct Oc Have a structural budget surplus equal to the outstanding public debt O d. Sell new bonds in the open market
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