Question

The following table contains approximate figures for gross domestic product (GDP) and the national debt in the United States for June 2001 and June 2010. The national debt represents the total amount of money owed by the federal government to holders of U.S. securities. All numbers are in trillions of dollars.

	GDP	Total National Debt	Debt Held by	Debt Held Outside Fed. Govt. and Fed. Reserve
	(Trillions of Dollars)	(Trillions of Dollars)	Federal Government	Foreign Ownership (External National Debt)	U.S. Ownership (External National Debt)
			and Federal Reserve	(Trillions of Dollars)	(Trillions of Dollars)
			(Trillions of Dollars)
June 2001	10.1	5.7	3.0	1.0	1.7
June 2010	14.5	13.2	4.6	4.0	4.6

Source: “U.S. Treasury, Bureau of Economic Analysis.”

Net public debt is the portion of the national debt that is held outside the federal government and the Federal Reserve System. In June 2001, the net public debt as a percentage of total national debt was __________.

In June 2001, the percentage of the U.S. national debt held by foreigners (external national debt) was ________ .

The fraction of the national debt held by foreigners will eventually need to be repaid to foreigners, thereby reducing the collective purchasing power of Americans. Between 2001 and 2010, the fraction of the national debt held by foreigners __________ .

The absolute level of the debt does not necessarily provide a clear indication of a nation's debt burden. Thus, economists often look at relative measures of the national debt. One possible relative measure of the national debt is the federal debt held by the public (outside the federal government and the Federal Reserve) as a percentage of GDP. In 2001, publicly held debt was _______ of GDP. Between 2001 and 2010, publicly held debt as a percentage of GDP _________ .

Answer 1