Help please, thank you~~?

Question

The following calculations help you see how the ratio of debt to GDP changes from one year to the next. Suppose that in a hypothetical country with a currency called the ducat, debt is equal to 140 trillion ducats and GDP is equal to 100 trillion ducats. This means that the ratio of debt to GDP is 1.4, or 140%. Also, suppose that the deficit is 7 trillion ducats, which is 7% of GDP.

When the government runs a deficit, it spends more than it collects in tax revenue. To make up the difference, it borrows. So if it runs a deficit of 7 trillion ducats, debt increases by 7 trillion ducats. So debt next year is 147 trillion ducats. Suppose that there is no growth in real GDP and inflation is equal to -2% per year. (Negative inflation is the same as deflation.) Measured in ducats, what will GDP be equal to next year?

A. 100 trillion ducats

B. 98 trillion ducats

C. 107 trillion ducats

D. 102 trillion ducats

Answer 1

B. 98 trillion ducats

100-2%=100-2=98

More right would be 100/1.02≈98.039

Answer 2

A       They are trying to draw your eye away from the core idea.  GDP is product.  what you make and sell.  Not affected by the new debt.