115k views
2 votes
If a country's debt-to-GDP ratio is 161, then.

A. The country has a surplus
B. The country is financially stable
C. The country has a high level of debt
D. The country has a low level of debt

User CMarius
by
8.2k points

1 Answer

1 vote

Final answer:

A country's debt-to-GDP ratio of 161 signifies that its national debt surpasses its gross domestic product by 161%, indicating a high level of debt, rather than financial stability or a surplus.

Step-by-step explanation:

When trying to understand the implications of a country's debt-to-GDP ratio of 161, it's essential to recognize that this ratio measures the country's debt relative to its gross domestic product (GDP).

The debt-to-GDP ratio provides insight into the financial health of a country. If a country's debt-to-GDP ratio is 161, it indicates that the country's national debt is 161% of its GDP.

Based on the provided information, this ratio would not imply that a country has a surplus (option A) or that it is necessarily financially stable (option B).

Rather, such a high ratio suggests that the country has a high level of debt (option C) compared to its economic output.

While there's no universally accepted threshold for a sustainable debt-to-GDP ratio, as it can vary by country's context and economic conditions, a ratio of 161 is considerably high and may indicate potential fiscal challenges and a need for policy measures to manage the debt levels.

User Soeun
by
7.3k points