Suppose an Economist Is Analyzing the Impact of a Debt

question 18

Multiple Choice

Suppose an economist is analyzing the impact of a debt and its ability to be paid. That economist will focus on

• A)strictly the debt.
• B)strictly the inflation adjusted amount of debt.
• C)strictly the ratio of the debt to GDP
• D)both the ratio of the debt to GDP and the interest payments as a percentage of GDP

---

Definitions:

CPI (Consumer Price Index)

An index that measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Real Wages

Wages that have been adjusted for inflation, reflecting the actual purchasing power of the income earned from work.

Base Year

The base year is a specific point in time used as a reference or benchmark for economic or financial calculations, such as index numbers and inflation measurements.

Percentage Changed

A measure that calculates the degree of change over time, indicating growth or decline in specific variables.