Question

6. The public debt - Ownership

The following table contains approximate figures for gross domestic product (GDP) and the national debt in the United States for June 2005 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	U.S. Ownership
			and Federal Reserve	(Trillions of Dollars)	(Trillions of Dollars)
			(Trillions of Dollars)
June 2005	12.3	7.8	4.0	1.9	1.9
June 2010	14.5	13.2	4.6	4.0	4.6

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

Publicly held debt is the portion of the national debt that is held outside the federal government and the Federal Reserve System. In June 2005, the publicly held debt as a percentage of total national debt was - choose one - 48.7% , 49 %, 53.8%, 49.5%

In June 2005, the percentage of the U.S. national debt held by foreigners was choose one - 26.5%, 24.9%, 24.4%, 25.8%

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 2005 and 2010, the fraction of the national debt held by foreigners choose one - decreased or increased

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 2005, publicly held debt was CHOOSE ONE - 50.5%, 46.2%, 51%. 30.9%   of GDP. Between 2005 and 2010, publicly held debt as a percentage of GDP choose one - decreased or increased

Answer 1

Publicly held debt is the portion of the national debt that is held outside the federal government and the Federal Reserve System. In June 2005, the publicly held debt as a percentage of total national debt was 1.9+1.9/7.8*100 = 48.7%

In June 2005, the percentage of the U.S. national debt held by foreigners was 1.9/7.8*100 = 24.4%

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 2005 and 2010, the fraction of the national debt held by foreigners:2005= 1.9/7.8*100 =24.4% and in 2010= 4/13.2*100=30.30% so it increased

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 2005, publicly held debt was 1.9+1.9/12.3*100 = 30.9% of GDP. Between 2005 and 2010, publicly held debt as a percentage of GDP: 2005=30.9% and in 2010 =4+4.6/14.5*!00=59.31% so it increased