Question

If a country's debt-to-GDP ratio is currently 20% and its debt is expected to grow from 50 billion dollars to 100 billion dollars in the next 30 years, what will the country's GDP have to be in 30 years to maintain the current debt-to-GDP ratio?

A. 20 billion dollars
B. 250 billion dollars
C. 10 billion dollars
D. 500 billion dollars

Answer 1

Answer: D is the answer I dont know why I just answered the question and got it wrong and it showed up to be D

Answer 2

The country's GDP has to be 500 billion dollars.

What is GDP?

'Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. As such, it also measures the income earned from that production, or the total amount spent on final goods and services (less imports).'

According to the given problem,

Debt / GDP = 20%

Current debt = 50 billion

Therefore, current GDP will be,

Debt/GDP = 20/100

50 billion/GDP = 20/100

GDP = 250 billion

In 30 years, Debt = 100 billion

In 30 years, to get the same debt, GDP ratio of 20%, GDP will be,

Debt/GDP = 20/100

100 billion/GDP = 20/100

GDP = 500 billion

Hence, we can conclude that the correct answer is option D.

Learn more about GDP and debt-to-GDP ratio here: https://brainly.com/question/16382911

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