One of the Main Problems with a Large National Debt

question 51

Multiple Choice

One of the main problems with a large national debt is the fact that:

• A) it may cause the government to go bankrupt.
• B) large sums of money must be raised to ultimately repay the debt.
• C) the debt may drive up interest rates and slow the rate of capital formation.
• D) the repayment of interest causes a burden in that there will be fewer goods and services available.

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Definitions:

Distortion of Judgment

refers to the impairment or alteration of an individual's ability to make clear, rational decisions or assessments due to various influences.

Group

A collection of individuals who come together for a common purpose or to achieve a shared goal.

Coaction Effect

is a phenomenon observed in social psychology where the presence of others engaged in the same task can influence an individual's performance.

Social Facilitation

The tendency for people to perform differently when in the presence of others than when alone, typically showing improvement on tasks.