How long can the country run a deficit?
A) as long as lenders are willing to finance that deficit at reasonable interest rates
B) as long as lenders are willing to finance that deficit at high interest rates
C) as long as borrowers are willing to finance that deficit at reasonable interest rates
D) as long as borrowers are willing to finance that deficit at high interest rates
E) as long as debt is risky

Question

Quizplus · Accepted Answer

As long as lenders are willing to finance the deficit at reasonable interest rates, the country can continue to run a deficit. However, if lenders start demanding unreasonably high interest rates, the country may not be able to sustain the deficit and may be forced to make changes to reduce it.

How Long Can the Country Run a Deficit