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graph national HOW America’s national DEBT STACKS UP A JAPAN ITALY UNITED STATES FRANCE UNITED KINGDOM CANADA GERMANY INDIA This graph shows national debt as a percentage of gross domestic product (GDP) for the 12 nations with the largest economies. SPAIN BRAZIL CHINA RUSSIA 0% 50 100 150 200 250 Government Debt as a Percentage of Gross Domestic Product source: International Monetary Fund, 2011 estimates NATION s the article “Washington’s Gridlock” (p. 8) notes, the U.S. faces a mounting national debt. To put this debt in perspective, economists often look at it as a percentage of gross domestic product, or GDP. GDP is the dollar value of all goods and services produced in a nation in a given year. The higher the debt is as a percentage of GDP, the tougher it may be for a country to pay up. analyze the graph 1 Canada’s national 2 Which country has debt is about ______ percent of its gross domestic product. a national debt that is more than two times its gross domestic product? a b c d a b c d 60 70 80 90 3 The U.S. and Italy Japan United States Canada China have the world’s two largest economies. What is the approximate difference, in percentage points, between the two nations’ debt-toGDP ratios? a b c d about 30 about 50 about 70 about 80 4 he U.S. national T debt is about $14 trillion. Based on the graph data, the U.S. gross domestic product is about _____. a b c d $100 billion $750 billion $3 trillion $14 trillion 5 Brazil and Italy both have a gross domestic product of about $2 trillion. You can infer from the graph that Brazil has ____ than Italy. a ore goods and m services b fewer goods and services c less debt d greater debt discussion questions 1 I n 2000, the U.S. national debt was 57 percent of its gross domestic product. What percentage of the GDP is our debt now? What factors and expenses do you think might have contributed to this monumental rise? 2 apan uses 60 percent of its tax revenues to pay interest on its national debt. That causes a shortfall in funding for government J programs, forcing the government to borrow even more. Do you think Japan will ever be able to break this cycle? If so, how? 3 hat are some reasons that families and businesses take on debt? Under what circumstances, if any, should a government be W willing to take on debt? Explain. 4 • Upfront • upfrontmagazine.com