Which of the Following Best Explains Why the Debt-To-GDP Ratio

question 187

Multiple Choice

Which of the following best explains why the debt-to-GDP ratio is important?

• A)If GDP is rising slower than debt, the government is, in some sense, living within its means.
• B)A declining debt-to-GDP ratio raises concerns about a country's financial difficulties.
• C)It is a better measure than the level of debt because it takes into account a country's net exports.
• D)It allows international comparisons of how indebted countries are.

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Definitions:

Price Discrimination

The practice of charging different people or groups of people different prices that are not cost justified.

Perfect Price Discrimination

A pricing strategy where a seller charges the maximum possible price to each customer based on their willingness to pay, capturing all consumer surplus as profit.

Consumer Surplus

The discrepancy between what consumers are prepared and able to spend on a product or service and the actual amount they end up paying.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, serving as an indicator of producer welfare.