Sustainable Government Debt as an Objective

What is the formula to calculate the debt-to-GDP ratio?

• Debt / GDP

• Debt + GDP

• Debt * GDP

• Debt - GDP

What does a high debt-to-GDP ratio indicate?

• Increased government revenue

• High economic growth

• Likelihood of defaulting on loans

• Low risk of default

According to the World Bank, what debt ratio may result in an adverse impact on economic growth?

• 150%

• 100%

• 77%

• 50%

Which country had a debt-to-GDP ratio of 182% in 2017 and had to be bailed out by Germany?

• Greece

• India

• Brazil

• Japan

How does the US government manage its debt despite having a high debt-to-GDP ratio?

• Reduce government spending

• Print more currency

• Default on loans

• Increase taxes

What is a budget deficit?

• When government debt is paid off

• When government spending exceeds revenues

• When government borrows money

• When government revenues exceed expenditures

Why do governments take on debt in the short-term?

• To reduce economic growth

• To reduce government spending

• To increase taxes

• To support long-term economic growth

How are government bonds rated for reliability?

• By the World Bank

• By Moody's and Standard and Poor

• By the Federal Reserve

• By the International Monetary Fund

What happens as the debt-to-GDP ratio increases in terms of government budget?

• No impact on investment

• Less money for investment

• More money for investment

• Increased government revenue

What is the opportunity cost of government debt?

• Future spending diverted to debt servicing

• Increased government revenue

• Decreased taxes in the future

• Increased investment in education and healthcare