Question

If a country's debt-to-GDP ratio is currently 20% and its debt is expected to grow from $15 trillion to $25 trillion in the next 15 years, what will the country's GDP have to be in 15 years to maintain the current debt-to-GDF ratio?​

Answer 1

$125 trillion

Explanation:

To maintain the current debt-to-GDP ratio of 20%, we can calculate the required GDP in 15 years using the following steps:

**Step 1:** Calculate the current GDP using the current debt and debt-to-GDP ratio:

Current Debt = $15 trillion

Debt-to-GDP Ratio = 20%

Current GDP = Current Debt / Debt-to-GDP Ratio

Current GDP = $15 trillion / 0.20 = $75 trillion

**Step 2:** Calculate the future debt using the expected increase in debt:

Future Debt = $25 trillion

**Step 3:** Calculate the required future GDP to maintain the current debt-to-GDP ratio:

Required Future GDP = Future Debt / Debt-to-GDP Ratio

Required Future GDP = $25 trillion / 0.20 = $125 trillion

Therefore, in order to maintain the current debt-to-GDP ratio of 20%, the country's GDP will need to be $125 trillion in 15 years.