NATIONAL DEBT

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What are some common causes of national debt?

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Government spending exceeding revenue, economic downturns, wars and military conflicts, borrowing for infrastructure or social programs

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How does national debt impact the economy?

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National debt impacts the economy through various channels such as interest rates, investment, inflation, and credit rating.

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What are some strategies for managing national debt?

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Implementing a combination of increasing taxes, reducing government spending, promoting economic growth, and refinancing debt at lower interest rates.

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Explain the role of government in national debt.

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The government borrows money through issuing bonds, treasury bills, and other securities to finance its operations and projects, manages the debt by making interest payments and refinancing existing debt, and its policies and decisions impact the level of national debt.

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Why is the debt-to-GDP ratio important in assessing national debt?

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It provides a measure of a country's ability to pay back its debt.

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What are the effects of high national debt on future generations?

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Negative impact on future generations through higher taxes, reduced government spending, decreased economic growth, and inflation.

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Discuss the impact of national debt on interest rates.

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National debt can lead to higher interest rates due to increased perceived risk and borrowing costs.

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How can a country reduce its national debt?

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By increasing taxes, cutting government spending, selling assets, or growing the economy to increase revenue.

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What are the consequences of ignoring national debt?

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Consequences include higher interest rates, inflation, reduced economic growth, and potential financial crises.

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Explain the concept of debt sustainability.

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Debt sustainability is the ability of a country to meet its debt obligations without jeopardizing its economic stability and growth.