Question

Which of the following are examples of the negative effects associated with government debt? Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. Increased interest rates. unanswered Increased taxes or lower spending in the future. unanswered Increased investment in the economy.

Answer 1

Answer: Increased interest rates, Increased taxes or lower spending in the future.

Explanation: What is Government debt? It is the difference between government spending and receipts leading to high volume of unpaid contractors, unpaid pensions, unpaid bills for goods and services etc.

The effect of government debt includes: 1. Increased interest rates 2. Increased taxes

3. lower spending in the future.