Question

Suppose that the annual federal deficit is $350 billion. Gross domestic product 'gdp', a measure of the size of the economy is $14. 5 trillion ($14,500 billion). Calculate the ratio between the deficit and gdp as a percentage rounded to one decimal place:.

Answer 1

Based on the information the ratio between the deficit and gdp as a percentage is 2.41%.

Ratio between the deficit and gdp:

Using this formula

Ratio between the deficit and gdp=Annual federal deficit/Gross domestic product×100

Where:

Annual federal deficit=$350 billion

Gross domestic product=$14,500 billion

Let plug in the formula

Ratio between the deficit and gdp=$350 billion/$14,500 billion×100

Ratio between the deficit and gdp=2.41%

Inconclusion the ratio between the deficit and gdp as a percentage is 2.41%.

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