Calculate the debt-gdp ratio of our economy in period t

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Reference no: EM132005485

Suppose that in our economy the debt-GDP ratio (bt-1) in period t-1 is 68.2% (or 0.682), interest rate expenditure at t-1 i(bt-1) is 2.1% of GDP (or 0.021), the primary deficit in period t (dt) is 9.4% of GDP, the inflation rate (p ) is 3% and the growth rate of real GDP (g) is 0.5%.

Calculate the debt-GDP (bt) ratio of our economy in period t.

Reference no: EM132005485

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