The debt to GDP ratio in the U.S. is unlikely to cause major problems as long as which of the following scenario holds?
A) Interest rates remain low.
B) Unemployment remains high.
C) GDP growth remains low.
D) A large proportion of the population stays in retirement collecting Social Security payments.

Question

Quizplus · Accepted Answer

When interest rates remain low, the cost of servicing the debt is lower, making it easier for the government to sustain the debt-to-GDP ratio. This is because lower interest rates reduce the government's interest payments on its debt, freeing up more money for other expenses. Conversely, if interest rates were to rise sharply, it would become much more expensive to service the debt, putting significant strain on the government's finances.

The Debt to GDP Ratio in the U