What makes it possible for a country to maintain a constant debt-to-GDP ratio and still have continual deficits is:
A)positive private savings.
B)trade surpluses.
C)continual inflation.
D)real economic growth.

Question

Quizplus · Accepted Answer

A country can maintain a constant debt-to-GDP ratio while having continual deficits if it experiences real economic growth. This growth increases the GDP, allowing the ratio to remain stable even as debt increases, because the size of the economy (the denominator in the ratio) is growing in tandem with the debt.

What Makes It Possible for a Country to Maintain a Constant