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QUESTION

Consider the following data about government debt and deficit in a givenyear:

Consider the following data about government debt and deficit in a givenyear:

minus−real interest rate on government bonds= 3%

minus−growth rate of real GDP= 3%

minus−current debtminus−tominus−GDP ratio= 25%

minus−primary budget surplus as a percentage of GDP= 2%

Over this oneminus−year period the debtminus−tominus−GDP ratio will have

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