Can a Large Public Debt Cause a Nation to Go

question 34

Essay

Can a large public debt cause a nation to go bankrupt? Explain.

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Definitions:

Aggregate Demand

The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.

Aggregate Supply

The total supply of goods and services available to an economy from producers at a given overall price level and at a given time period.

Hyperinflation

An extremely high and typically accelerating inflation rate, causing a rapid erosion of currency's value.

Deflation

A decrease in the general price level of goods and services, often characterized by the increase in the value of money.