The "solvency condition" states that the debt-GDP ratio will rise continuously so long as
A) the real GDP growth rate exceeds the real interest rate.
B) the real interest rate exceeds the real GDP growth rate.
C) the real interest rate exceeds the nominal interest rate.
D) the nominal interest rate exceeds the cost of borrowing.
B
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Which of the following decreases the demand for loanable funds and shifts the demand for loanable funds curve leftward?
A) The real interest rate rises. B) The economy experiences a recession. C) Wealth decreases. D) Technology that increases productivity is introduced. E) An economy experiences a rapid increase in population.
If firms pay what are called "efficiency wages," they pay wages that
A) are lower than average to ensure maximum profit. B) are mandated by the government. C) will eventually lower the unemployment rate. D) motivate workers to increase their productivity.
If the law of one price holds for a single good, then absolute PPP measured with price indexes will also hold
Indicate whether the statement is true or false
The rule of rational choice is that in trying to make themselves better off, people alter their behavior if the expected marginal benefits to them from doing so ____ the expected marginal costs they will bear. a. exceed
b. equal. c. are less than. d. Either a. or b.