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Excessive government borrowing can lead to higher public debt, which may result in increased interest rates as investors demand higher returns for perceived risks. This can crowd out private investment, stifling economic growth. Additionally, if borrowing is not managed sustainably, it can raise concerns about a government's ability to meet its obligations, potentially leading to inflation or a loss of confidence in the economy. Long-term reliance on debt can undermine fiscal stability and limit future policy options.
What else can I help you with?
what is an effect of excessive government borrowing?
It becomes more expensive for the private sector to borrow
What happens as a result of excessive government borrowing?
It becomes more expensive for the private sector to borrow.
Which best describes the economic effect that results when the government increases interest rates?
Borrowing money becomes more expensive and there is less investment in production.
What best describes the economic effect that results when the government increase interest rates and restricts the lending of money?
Borrowing money becomes more expensive and there is less investment in production.
How a government might finance its expenditure?
tax, revenue from government enterprises and tariffs, government borrowing, selling government businesses.
What an effect of excessive government borrowing?
It becomes more expensive for the private sector to borrow
what is an effect of excessive government borrowing?
It becomes more expensive for the private sector to borrow
What happens as a result of excessive government borrowing?
It becomes more expensive for the private sector to borrow.
What is excessive borrowing?
when you borrow to much money
Which best describes the economic effect that results when the government increases interest rates?
Borrowing money becomes more expensive and there is less investment in production.
Who is responsible for the federal government borrowing?
bobo
Who creates caps on government borrowing?
congress
What are the theories of public borrowings?
Theories of public borrowing include the crowding-out effect, which suggests that government borrowing can lead to higher interest rates and reduced investment from the private sector. Another theory is the Ricardian equivalence, which argues that individuals will save more when they anticipate higher future taxes to pay for government borrowing. Lastly, the loanable funds theory posits that government borrowing competes with businesses for available funds, potentially driving up interest rates.
What effect did the post war era have in consumer borrowing?
It improved it
What best describes the economic effect that results when the government increase interest rates and restricts the lending of money?
Borrowing money becomes more expensive and there is less investment in production.
What is the effect of excessive fire to diamonds?
Probably no effect.
How a government might finance its expenditure?
tax, revenue from government enterprises and tariffs, government borrowing, selling government businesses.
