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Assume a country has no debt at the start of year 1 but experiences the following deficits and surpluses. What is the absolute size of its debt after year 4? In which year did the country have the greatest debt burden? What statistic did you calculate to determine that?
Year Budget Balance Amount ($billions) Real GDP ($billions)
1 Deficit $30 $700
2 Deficit $20 $695
3 Surplus $10 $720
4 Deficit $5 $735
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a. For a univariate production function, the marginal product always intersects the average product at the maximum of average product.
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