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Suppose the country of Piedmont borrows money to start a brand-new infrastructure program. GDP is currently $400 billion. The plan will take the public debt from $250 billion to $350 billion in ten years, when GDP is projected to be $425 billion. What is the current debt as a percentage of GDP

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Answer:

The current debt as a percentage of GDP = 62.5%

Explanation:

To calculate the current debt as a percentage of GDP, let us outline the current debt and GDP.

Current debt = $250 billion

current GDP = $400 billion

current debt as a percentage of GDP is calculated thus

[tex]\frac{current\ debt}{current\ GDP} \times 100\\= \frac{250}{400} \times 100\\\\ = \frac{25000}{400} \\= 62.5 \%[/tex]

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