A country has a GDP of $500 billion and government spending is $125 billion. What is the government spending as a percentage of GDP?

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Question

A country has a GDP of $500 billion and government spending is $125 billion. What is the government spending as a percentage of GDP?

Accepted Answer

25% — The formula is: Government spending as % of GDP = (Government spending ÷ GDP) × 100. Calculation: (125 ÷ 500) × 100 = 25%. Option A (20%) results from incorrectly dividing 100 by 500. Option C (40%) results from inverting the division. Option D (4%) results from not multiplying by 100.

Answer

4%

Answer

20%

Answer

25%

Answer

40%

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