The following headline appeared in The Globe and Mail in March 2018, when the Canadian and U.S. federal governments were planning increases in budget deficits: “As Canada, U.S. roll along deficit track, concerns emerge about ability to steer through next recession.”

a. From online data sources, what were the Canadian and U.S federal debt-to-GDP ratios in early 2018?

b. Explain why any government with a high debt-to-GDP can find it difficult to “steer through the next recession.”

c. Given your answers to parts (a) and (b), which of the two governments were in the more difficult situation? Explain.