To evaluate relative changes in the net public debt, we must
A) look at the absolute amount owed by the government.
B) compare it to the nation's real GDP.
C) look at the annual percentage change in the public debt.
D) compare it to the debts of all developed countries.

Question

Quizplus · Accepted Answer

Comparing the net public debt to the nation's real GDP allows for a more accurate assessment of the government's ability to service its debt, as a larger GDP can indicate a stronger economy and increased revenue potential. Absolute amount and annual percentage change alone do not provide this context, and comparing only to other developed countries may not be relevant to the specific country's economic conditions.

To Evaluate Relative Changes in the Net Public Debt, We