Accumulating debt can be a problem for the federal government because:
A)it is currently in danger of defaulting on the debt.
B)a large debt to GDP ratio causes crowding out.
C)purchases of roads and bridges add burden but no benefit to the economy.
D)raising the money to borrow is difficult.

Question

Quizplus · Accepted Answer

A large debt to GDP ratio results in higher interest rates, which can crowd out private investment and reduce economic growth. This can have negative effects on the overall economy. While A and D may be concerns in certain circumstances, they are not currently the case for the federal government. Choice C does not accurately depict the benefits of infrastructure spending on the economy.

Accumulating Debt Can Be a Problem for the Federal Government