Question

What is one of the major problems caused by a high national debt?

A. It prevents the federal government from balancing the budget.
B. Money spent on servicing the debt causes prices to rise.
C. It prevents foreign governments from investing in U.S. businesses.
D. Money spent on servicing the debt cannot be spent on other things.

Answer 1

The major problems caused by a high national debt is
Money spent on servicing the debt cannot be spent on other things.
because
budget has little relevance with the actual debit so it cant be A
so correct option i conclude is D
hope it helps

Answer 2

The fourth alternative is correct (D).

The national debt is an instrument that the Government uses to influence the economy and to launch or withdraw money from circulation through the sale or purchase of government bonds, that is, it is an instrument of economic policy.

Government expenditures with real sectors are considered as primary expenditures, ie, non-financial expense. So the budget balance is not actually affected because of the debt because it is separate.

However, the percentage of spending that is used between the two primary and financial sectors may vary, ie the more financial expense, the lower the percentage in disposition for the actual expenditure.

One exception is when the economy grows a lot. In this case, growth of financial expenses and real expenses can happen at the same time.