If a government has large consecutive budget deficits and if the public debt is growing faster than GDP, its ratio of debt to GDP will increase.

Question

Quizplus · Accepted Answer

When a government has consecutive budget deficits and the public debt is growing faster than GDP, it means that the government is borrowing more than it is earning through taxes and other sources. This leads to an increase in the government's total debt level, and when the debt increases faster than GDP, the debt-to-GDP ratio also increases. Therefore, it is true that a government with large consecutive budget deficits will see an increase in the ratio of debt to GDP.

If a Government Has Large Consecutive Budget Deficits and If