In 2017, an article in the Wall Street Journal discussed a report by the World Bank. According to the report, “More than half of emerging economies saw their debt-to-GDP ratios rise 10 percentage points and in a third, budget balances worsened by more than five percentage points.”
a. What does the report mean by “budget balances”?
b. Is there a connection between these countries experiencing worsening budget balances while also experiencing increasing debt-to-GDP ratios? Briefly explain.