The table below shows government spending data over eight years in Debtland. All figures are in billions of dollars. The symbols used are as defined in the text.

a. Compute Debtland’s budget deficit in each year and complete column 4 in the table. (Since we are computing the deficit, a negative number indicates a surplus.)

b. Compute Debtland’s primary budget deficit in each year and complete column 5 in the table.

c. Suppose the initial stock of debt (in 2012) was $400 billion. Noting that the deficit in 2013 adds to the existing stock of debt, what is the stock of debt by the end of 2013?

d. Compute the stock of debt for each year and complete column 6 in the table.

e. Suppose you know that Debtland’s debt-to-GDP ratio was the same in 2020 as in 2012. By what percentage did GDP grow between 2012 and 2020?

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Year G T iD Budget Primary Stock (1) (2) (3) Deficit Budget of (4) Deficit Debt (5) (6) 2013 175 175 25 2014 180 180 26 2015 185 185 227 27 2016 188 190 26 2017 185 195 25 - 2018 185 200 24 2019 180 205 23 2020 175 210 22 1 1 I - - - I -