Question

2. Greece, Ireland and Portugal all went through national budget difficulties after the financial crisis. Use the following data to answer the questions regarding the sovereign debt of these nations (all numbers are in billions of dollars)

	1999		2009
	Debt	GDP	Debt	GDP
Greece	$124	$112	$350	$290
Ireland	$28	$64	$68	$98
Portugal	$51	$102	$160	$180

a) Compute the debt-to-GDP ratio for all three nations in both 1999 and 2009.

b) Compute the average yearly budget deficit for each nation over this period.

c) In your judgement, which of the following four nations was in the worst fiscal shape in 2009? Support your answer with computations from parts (a) and (b).

Answer 1

A Debt to GDP ratio = Debb/ GoP 482 yebar-1999 Greece =$1244112 = 1,107 ireland = $28/& 64 = 0,437 Portugal = $51/8102 = 0.5. for year = 2009, Greece = $ tess 350/4290= 1.806 wieland = $ 968/498 = 0.693 Portugal = 1601$180 = 0.892 B, awerage yearly budget deficit = (abb 1209 - 2009- debt 1999);/10 grece = $ 350 = $112/10 = 9 Billon dello ireland = $ R 160$ 51 /it = 1441 Billion dollhouse Cr Greece in the world fascal shape of the delit - to GDP in Created higheet aucongesh all the cowitoys, CS Scanned with 10206-7.107=0.099 CamScanner