A government can pay off its debt if:
A)GDP and the debt grow at the same rate.
B)the ratio of debt to GDP is increasing.
C)GDP grows faster than the debt.
D)the debt grows faster than GDP.

Question

Quizplus · Accepted Answer

If GDP is growing faster than the debt, it means the government's revenue is increasing, making it easier to pay off the debt. This is because the debt becomes a smaller percentage of the overall economy as GDP grows, making it easier to manage. Options A and B are not ideal as they do not account for the growth rate of the debt, while option D implies that the debt is growing too quickly to be managed effectively.

A Government Can Pay Off Its Debt If