If the government runs a primary deficit in year zero of B₀,and,in year 1,decides to stabilize the debt (i.e.,prevent the deficit from rising any further),then in year 1 and beyond,it must run a primary surplus equal to
A)zero.
B)B₀.
C)(1 + r)B₀.
D)r)
E) none of the above

Question

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The Answer of If the government runs a primary deficit in year zero of B₀,and,in year 1,decides to stabilize the debt (i.e.,prevent the deficit from rising any further),then in year 1 and beyond,it must run a primary surplus equal to
A)zero.
B)B₀.
C)(1 + r)B₀.
D)r)
E) none of the above

If the Government Runs a Primary Deficit in Year Zero