Debt and Deficits in Belgium. Here are some data for Belgium in 1989: GDP: 6,160 billion Belgian francs Debt: 6,500 billion Belgian francs Deficit: 380 billion Belgian francs Interest Rate on Bonds:...

Debt and Deficits in Belgium. Here are some data for Belgium in 1989:

GDP: 6,160 billion Belgian francs

Debt: 6,500 billion Belgian francs

Deficit: 380 billion Belgian francs

Interest Rate on Bonds: 8.5 percent

Use the data to answer the following questions:

a. What are the deficit/GDP ratio and debt/GDP ratio? How do these ratios compare to the same ratios in the United States today? To what period in U.S. history does the debt/GDP ratio in Belgium correspond?

b. Approximately how much of the budget in Belgium is devoted to interest payments on its debt? If Belgium could wipe out its debt overnight, what would happen to its current budget deficit?