a. What is public debt? b. Outline any three reasons why counties borrow. c. Highlight any three effects of a huge national debt on the economy of a country...
c. Highlight any three effects of a huge national debt on the economy of a country.
a. Public debt refers to the amount of money owed by a government to its creditors. It includes bonds, bills, and other securities that a government has issued in order to raise money to fund its operations and pay for public goods and services.
b. Three reasons why countries borrow are:
To finance government spending, such as investments in infrastructure, education, and healthcare.
To respond to economic downturns or emergencies, such as natural disasters or financial crises.
To fund ongoing government operations, such as paying for salaries and benefits for government employees.
c. Three effects of a huge national debt on a country's economy are:
Increased borrowing costs: The more a country borrows, the more it has to pay in interest on its debt, which can lead to increased borrowing costs and a larger share of government spending going towards debt repayment.
Reduced spending on public goods and services: A large debt burden can limit a government's ability to invest in public goods and services, such as infrastructure, education, and healthcare.
Weakened currency: A high level of debt can lead to a decrease in confidence in a country's ability to repay its debt, which can cause its currency to weaken and make imports more expensive.
a. Public debt refers to the amount of money owed by a government to its creditors. It includes bonds, bills, and other securities that a government has issued in order to raise money to fund its operations and pay for public goods and services.
b. Three reasons why countries borrow are:
To finance government spending, such as investments in infrastructure, education, and healthcare.
To respond to economic downturns or emergencies, such as natural disasters or financial crises.
To fund ongoing government operations, such as paying for salaries and benefits for government employees.
c. Three effects of a huge national debt on a country's economy are:
Increased borrowing costs: The more a country borrows, the more it has to pay in interest on its debt, which can lead to increased borrowing costs and a larger share of government spending going towards debt repayment.
Reduced spending on public goods and services: A large debt burden can limit a government's ability to invest in public goods and services, such as infrastructure, education, and healthcare.
Weakened currency: A high level of debt can lead to a decrease in confidence in a country's ability to repay its debt, which can cause its currency to weaken and make imports more expensive.