If the government runs a primary deficit in year zero of B0, and decides to repay it in year t (i.e., bring the debt back down to its pre- existing level) , then in year t it must run a primary surplus equal to:
A) B0(1 + r) .
B) B0(1 + r) t.
C) one.
D) zero.
E) B0.
Correct Answer:
Verified
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