Question

If a country's debt-to-GDP ratio is currently 50% and its debt is expected to

grow from $40 trillion to $50 trillion in the next 5 years, what will the country's
GDP have to be in 5 years to maintain the current debt-to-GDP ratio?

Answer 1

To maintain a 50% debt-to-GDP ratio with an increase in debt from $40 trillion to $50 trillion, the future GDP would need to be $100 trillion.

Step-by-step explanation:

To calculate the future GDP required to maintain a debt-to-GDP ratio of 50% when the debt has grown from $40 trillion to $50 trillion, we can set up a proportion. The equation will be (Debt Future / GDP Future) = (Debt Current / GDP Current), where the current ratio is 50% or 0.5, and the future debt will be $50 trillion.

So the equation will look like this:

(50 trillion / GDP Future) = 0.5

To find the GDP Future, we just need to solve for GDP Future:

GDP Future = 50 trillion / 0.5

GDP Future = 100 trillion

Therefore, the country's GDP will have to be $100 trillion in five years to maintain the current debt-to-GDP ratio of 50%.