If government borrowings increase during a period of economic growth, then the expansion of government debt is cyclical.

Question

Quizplus · Accepted Answer

If government borrowings increase during a period of economic growth, it indicates a structural or long-term increase in government debt rather than a cyclical one. Cyclical increases in government debt are usually seen during economic downturns when the government needs to borrow more to stimulate the economy.

If Government Borrowings Increase During a Period of Economic Growth