Which of the Following Will Cause a Reduction in the Debt-To-GDP

question 48

Multiple Choice

Which of the following will cause a reduction in the debt-to-GDP ratio?

• A)an increase in the real interest rate
• B)an increase in the ratio of the primary deficit to GDP
• C)an increase in the growth rate of output
• D)all of the above

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Definitions:

Liability Classification

The process of categorizing liabilities on the balance sheet as either current (due within one year) or long-term.

Short-Term Obligation

A debt or other financial obligation that is due to be paid within one year or within the entity's operating cycle if longer.

Long-Term Liability

Obligations or debts due in more than one year, reflecting a company's financing activities and including loans, bonds payable, and lease obligations.

GAAP Requirements

The standards or guidelines for financial accounting and reporting that accountants are required to follow, known as Generally Accepted Accounting Principles.