Increasing government debt relative to GDP does not cause which of the following?
A)crowding out
B)an opportunity cost for the funds used to service the debt
C)the possibility of higher taxes in the future
D)lower interest repayments relative to the size of GDP

Question

Quizplus · Accepted Answer

Increasing government debt relative to GDP does not cause lower interest repayments relative to the size of GDP. Crowding out, an opportunity cost for the funds used to service the debt, and the possibility of higher taxes in the future can all be caused by increasing government debt relative to GDP.

Increasing Government Debt Relative to GDP Does Not Cause Which