Question

If a country's GDP decreases, but its debt increases during that year, then the country's debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes.

Answer 1

Answer:

Increase

Explanation:

Let us assume that GDP was $50 trillion and debt was $5 trillkon in 2018 and GDP fell to $45 trillion in 2019 and debt increased to $15 trillion. The debt to GDP ratio in 2018 is $0.1 trillion and in 2019 it is 0.3. The debt to equity ratio increased.