What are the two most common reasons for a sovereign debt crisis?
What will be an ideal response?
Chronic government budget deficits that eventually result in the interest payments required on government bonds taking up an unsustainably large fraction of government spending, or a severe recession that increases government spending and reduces tax revenues, resulting in soaring budget deficits.
Economics
You might also like to view...
If the Treasury borrows from the public and makes an expenditure of an equal amount, it will affect
A) the supply of currency. B) the money supply. C) the supply of government securities. D) bank reserves.
Economics
Without foreign trade, the dollars used to buy goods and services are included in the circular flow as consumption, investment, and government spending.
Answer the following statement true (T) or false (F)
Economics