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Title: How does an increase in GDP increase the ability to service debt? Read details? Post by: finalgurl90 on Feb 7, 2013 I know people say the bigger a debt is, the more GDP has to grow to service that debt. But, don't you need money to pay off debt? not stuff...so how does an increase in gdp help you service debt??
My theory is the following: if you have an increase in GDP, things are cheaper/you can buy more with your money so you have more money leftover with which you can pay down your debt. Title: How does an increase in GDP increase the ability to service debt? Read details? Post by: tontron on Feb 7, 2013 GDP, total dollar value of all goods and services a nation produces is a nations income, or wealth creation. The greater the GDP the more wealth. the more tax revenue is produced.
In fact, that is the determining factor in investors decisions to buy government bonds, which is how the country borrows,, it's ability to pay its debt Title: How does an increase in GDP increase the ability to service debt? Read details? Post by: Data on Feb 7, 2013 Content hidden
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