Economics for Today 9th Edition by Irvin Tucker

Exercise 31

As the size of a nation's outstanding debt gets larger and larger relative to the size of the economy
A) eventually it will become difficult for the country to borrow in global credit markets.
B) the country will have to pay higher real interest rates in order to induce investors to purchase its bonds.
C) at some point, the country will be more or less forced to bring spending into line with revenues in order to maintain the confidence of investors.
D) All of the answers above are correct.