15Mar_Quiz_p48Major financial crises are typically followed by an extended period of deleveraging. Yet, to the surprise of researchers at the McKinsey Global Institute, debt and leverage in most countries are higher today than they were in 2007. Find out how high by taking our quiz:

1. Since 2007, global debt has grown by $57 trillion to $199 trillion, raising the ratio of total debt to world GDP by:
A. 6 percentage points
B. 12 pp
C. 17 pp
D. 20 pp

2. Of that $199 trillion in debt, which sector holds the most?
A. Households
B. Corporate
C. Government
D. Financial

3. The average debt-to-GDP ratio among advanced economies is 280%. Rank the following countries by size of debt-to-GDP ratio, in descending order:
A. Germany
B. Greece
C. Japan
D. Spain
E. United States

4. The average debt-to-GDP ratio among developing economies is 121%. Rank the following countries by size of debt-to-GDP ratio, in descending order:
A. Russia
B. Brazil
C. Hungary
D. China
E. Mexico

5. By mid-2014, China’s total debt had risen from $7 trillion in 2007 to:
A. $14 trillion
B. $21 trillion
C. $28 trillion
D. $35 trillion

6. Household debt continues to grow in most advanced economies, thanks to rising house prices. But in the four countries below, the ratio of household debt to disposable income has decreased since the 2007 peak. Rank them according to decrease in household debt-to-income ratio, in descending order:
A. Ireland
B. Spain
C. United Kingdom
D. United States

7. Among advanced economies, three countries, all in northern Europe, have household debt-to-income ratios well over 200%. Which are they?
A. Denmark
B. Ireland
C. Netherlands
D. Norway
E. Sweden

Answers: (1) C; (2) C ($58 trillion); (3) C (400%), B (317%), D (313%), E (233%), A (188%); (4) C (225%), D (217%), B (128%), E (73%), A (65%); (5) C; (6) A (-33 pp), D (-26 pp), C (-17 pp), B (-13 pp); (7) A (269%), C (230%), D (266%)

Source: McKinsey Global Institute, “Debt and (Not Much) Deleveraging,” February 2015

, , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *