Refer to the following table in the chapter, which assumes the country continues to pay an interest rate of 8% on its debt. Suppose, instead, that the interest rate were 10%, while each year€™s nominal GDP and nominal debt remain as specified in the table. Enter new numbers for the last two columns in the table. Briefly, what impact does a higher interest rate have on (a) the burden of the debt? (b) the increase in the burden of the debt over time?

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(5) (2) Nominal Debt Burden (1) Nominal (4) Interest (Interest payments as % of GDP) Column (4) + Column (1) National (3) Debt Ratio Payments (at 8% Column (2) + Column (1) GDP Debt interest rate) 0.08 x Column (2) (growing at 10% per year) (growing at 10% per year) Year I $10,000 billion $5,000 billion 50% $400 billion 4% 4% 50% Year 2 $11,00 billion $5,500 billion $440 billion $12,100 billion Year 3 $6,050 billion 50% $484 billion 4% Year 4 $13,310 billion $6,655 billion 50% $532.4 billion 4%