Question

If a country's debt-to-GDP ratio is currently 10% and its debt is expected to grow from 30 billion dollars to 60 billion dollars in the next 20 years, what will the country's GDP have to be in 20 years to maintain the current debt-to-GDP ratio

Answer 1

Answer: 600 Billion Dollars

Explanation:

Just took the test :)

Answer 2

Current Debt = 30 billion dollars

Debt to GDP ratio= 10%

Let GDP= x billion

Increased Debt = 60 billion dollars

Debt to GDP ratio= 10%

Let GDP= y billion

As, Debt to GDP ratio have to be same in both the cases.

`(30)/(x)=(10)/(100)\\\\x=(3000)/(10)=300\\\\ (60)/(y)=(10)/(100)\\\\y=(6000)/(10)=600`

So, New GDP=600 billion