As the size of a nation's outstanding debt gets larger and larger relative to the size of the economy:
a. eventually it will become difficult for the country to borrow in global credit markets.
b. the country will have to pay higher real interest rates in order to induce investors to purchase its bonds.
c. at some point, the country will be more or less forced to bring spending into line with revenues in order to maintain the confidence of investors.
d. all of these are correct.
d
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What will be an ideal response?
A flow variable
a. measures a process that takes place over a period of time b. is often used to measure the amount of wealth that a household has c. is related to the supply and demand of water d. measures a quantity in existence at a moment in time e. is a definition unique to economics