Suppose in the beginning of 2013, a country has a national debt of $8,000 billion. Its GDP in J2013 is $32,000 billion and its budget deficit of $1,600 billion. Compute its debt-GDP ratio at the end of the year.

Question

Quizplus · Accepted Answer

The debt at the end of the year is the initial debt plus the budget deficit, which is $8,000 billion + $1,600 billion = $9,600 billion. The GDP is $32,000 billion. The debt-GDP ratio is ($9,600 billion / $32,000 billion) * 100% = 30%.

Suppose in the Beginning of 2013, a Country Has a National