When Congress and the president agree on federal budgets that run significant deficits over many years, what are the likely economic consequences?

Question

Quizplus · Accepted Answer

When the government runs significant deficits, it needs to borrow money by issuing treasury bonds and securities. If investors perceive a higher risk of default, they may demand higher interest rates to compensate for that risk. This can lead to higher borrowing costs for the government and higher interest rates for consumers and businesses, which can slow down economic growth.

When Congress and the President Agree on Federal Budgets That