Answer to Question #64215 in Macroeconomics for Teresa

Question

Transfers to households are given by V and their ratio to GDP is denoted by v. What is then the dynamic equation for public debt ratio?
(a) ∆b=g−t+(r−y)b
(b) ∆b=g−v−t+(r−y)b
(c) ∆b=g+v−t+(r−y)b
(d) ∆b=g−t+(r−y−v)b
(e) ∆b=g−t+(r−y+v)b

Answer 1

The dynamic equation for public debt ratio is ∆b=g−v−t+(r−y)b, that`s why answer of this question is b).