Question

If a country’s GDP increases, but its debt also increases during that year, then the country’s debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes.

Answer 1

If a country’s GDP increases, but its debt also increases during that year, then the country’s debt to GDP ratio for the year will increase or decrease in proportion to the magnitude of the changes.

Explanation:

"Debt-to-GDP ratio" is a clear indicator into whether the country has more debt or not. There are many factors that lead to imbalance of "debt-to-GDP ratio". A high debt-to-GDP may be an indicator of economic problems looming in the nearer future. In addition, a "high-debt ratio" is acceptable in the case of where economy is growing rapidly.  

However, since the problem results from debt in the first place, some countries even after rapid growth can’t pay back the debts. An example is Japan which is in economic stagnation due to 1980's debt it incurred due to rapid growth.