Answered

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If a country's debt-to-GDP ratio is currently 10% and its debt is expected to grow from 30 billion dollars to 60 billion dollars in the next 20 years, what will the country's GDP have to be in 20 years to maintain the current debt-to-GDP ratio?

A. 300 billion dollars
B. 6 billion dollars
C. 600 billion dollars
D. 3 billion dollars

Sagot :

GinnyAnsweridn
To find the country's GDP in 20 years that would maintain the current debt-to-GDP ratio, follow these steps:

### Step 1: Understand the given data
- Current debt-to-GDP ratio: 10%, which can be expressed as 0.10.
- Future debt: 60 billion dollars.

### Step 2: Set up the formula for the debt-to-GDP ratio
The debt-to-GDP ratio is given by:

[tex]\[ \text{Debt-to-GDP Ratio} = \frac{\text{Debt}}{\text{GDP}} \][/tex]

We need to maintain the same ratio in the future. Hence, we can rearrange the formula to solve for the future GDP:

[tex]\[ \text{GDP} = \frac{\text{Debt}}{\text{Debt-to-GDP Ratio}} \][/tex]

### Step 3: Substitute the values into the formula
Using the future debt (60 billion dollars) and the current debt-to-GDP ratio (0.10), we substitute these values into our formula:

[tex]\[ \text{GDP} = \frac{60}{0.10} \][/tex]

### Step 4: Perform the calculation
[tex]\[ \text{GDP} = \frac{60}{0.10} = 600 \text{ billion dollars} \][/tex]

### Step 5: Select the correct answer
Based on the options given, the correct answer is:

C. 600 billion dollars
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