The average tax rate required to service the public debt is roughly measured by
A) the absolute size of the debt.
B) the debt as a fraction of the GDP.
C) interest on the debt as a percentage of the GDP.
D) the ratio of government spending to the GDP.

Question

Quizplus · Accepted Answer

The average tax rate required to service the public debt is best measured by the interest on the debt as a percentage of the GDP. This reflects the actual cost of the debt to the government and, by extension, to the taxpayers, as it directly relates to the interest payments that must be made annually, which are a function of the overall economic output.

The Average Tax Rate Required to Service the Public Debt