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The absolute size of the public debt is the nominal amount that a country owes as the debt.It is the total deficits accumulated over time minus the surpluses.The public debt's relative size is expressed as the percentage of the economy's real GDP.

$\mathit{R}\mathit{e}\mathit{l}\mathit{a}\mathit{t}\mathit{i}\mathit{v}\mathit{e}\mathbf{}\mathit{s}\mathit{i}\mathit{z}\mathit{e}\mathbf{=}\frac{\mathbf{P}\mathbf{u}\mathbf{b}\mathbf{l}\mathbf{i}\mathbf{c}\mathbf{}\mathbf{D}\mathbf{e}\mathbf{b}\mathbf{t}}{\mathbf{R}\mathbf{e}\mathbf{a}\mathbf{l}\mathbf{}\mathbf{G}\mathbf{D}\mathbf{P}}\mathbf{×}\mathbf{100}$

The distinction between the two methods for the measurement of public debt is crucial.The latter informs about repaying capacity of the economy. Also, the relative size gives a better international comparison. The total public debt's absolute size may sometimes overstate the problem, but relative size gives a clear picture.

For example, a public debt of $10 trillion for the U.S. federal government might seem huge. However, the total public debt relative to its GDP must be smaller than the other nations. And the U.S. economy must be capable of repaying its debt.

Refinancing the debt means selling new bonds despite the existing loans at better terms.The funds from new bonds are used to pay off the previous debt. It is the overstanding of debt over the debt. The country can refinance the debt if the relative size is small, and the economy can repay further debts.

Retiring the debt is purchasing back the bonds by the federal government from those who hold the bonds. It can also be understood as the settling of the debt at maturity.

An internally held public debt is when the bondholders belong to the domestic country. The bonds are transferred internally, and there is no foreign party involvement.

While the externally held public debt is when the debt process becomes overseas, the borrowers and bondholders belong to different economies. In externally held public debt, the exchange rate can vary due to the size of the debt.

Retiring an internally held public debt involves just purchasing back the bonds from the bondholders.The drawback of retiring an internally held public debt is equal income distribution.

The majority of the bondholders in an economy are the big business houses. Retiring of the debt transfers majority of the economy's income from lower-income groups (in the form of taxes) to the wealthier groups (repaying the debt). However, the money circulates inside the domestic country only.

Retiring an externally held public debt involves the exchange of currencies. Sometimes the foreign bondholders can ask for domestic products in exchange for the bonds.

Sometimes, the dollars gained in exchange for the bonds can be settled by the foreign exchange, declining the foreign exchange reserves of the home country. A decline in foreign exchange reserve can depreciate the domestic currency.