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irga5000 [103]
3 years ago
10

How can heavy federal debt lead to higher interest rates ?

Social Studies
2 answers:
zloy xaker [14]3 years ago
8 0

Answer:

A) the government causes increased borrowing competition which leads banks to increase interest rates

spayn [35]3 years ago
7 0

Answer:

The government causes increased borrowing competition which leads banks to increase interest rates ( A )

Explanation:

when the federal debt is heavy it leads to the federal government pushing more money into the economy and this act leads to inflation ( increase in the price of goods and services without the corresponding increase in the purchasing power ). since the purchasing power i.e the value of the currency is low the rate of Borrowing will increase in order to meet up with the current prices in the market.

The increase in borrowing competition will lead to the banks increasing the interest rates of the loans in order to make profits as well.

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3 years ago
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Answer:

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3 years ago
Please help me edit the following text to make it better
astra-53 [7]

The girl tried to search for the old man who helped her, but she didn’t remember his look due to the heavy rain. She was roaming the streets with the umbrella, given by the old man, when she heard an old woman shouting.

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