What is the purpose of a debt-to-GDP ratio in public debt management?

CA Foundation · Business Economics · MTP · January 2025
What is the purpose of a debt-to-GDP ratio in public debt management?
(A) A. To measure the government's annual revenue
(B) B. To evaluate the proportion of debt relative to the country's economic output
(C) C. To assess the level of inflation in the economy
(D) D. To determine the amount of currency in circulation

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. To evaluate the proportion of debt relative to the country's economic output

Topics: Business Cycles

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