India’s external debt as a percentage of GDP was 15% in 2005 and 20% in 2015. Bangladesh’s external debt was 12% in 2005 and 18% in 2015. Calculate the absolute change in debt‑to‑GDP ratio for each country and state which country experienced a larger increase.
Answer
India: 5%; Bangladesh: 6%; Bangladesh experienced a larger increase
The correct answer is India: 5%; Bangladesh: 6%; Bangladesh experienced a larger increase — Compare the two changes: 6% > 5%, so Bangladesh had a larger increase.
Step-by-step solution
- Subtract 2005 value from 2015 value for India: 20% – 15% = 5%.
- Subtract 2005 value from 2015 value for Bangladesh: 18% – 12% = 6%.
- Compare the two changes: 6% > 5%, so Bangladesh had a larger increase.
Common mistake: Mixing up percentage points with percentage change or using the wrong sign in subtraction
Concept tested: Debt‑to‑GDP change
Published · How this solution was prepared and checked
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