What is one of the major problems caused by a high national debt? A. It prevents the federal government from balancing the budget. B. Money spent on servicing the debt causes prices to rise. C. It prevents foreign governments from investing in U.S. businesses. D. Money spent on servicing the debt cannot be spent on other things.

Question

What is one of the major problems caused by a high national debt?  A. It prevents the federal government from balancing the budget.	  B. Money spent on servicing the debt causes prices to rise.	  C. It prevents foreign governments from investing in U.S. businesses.	  D. Money spent on servicing the debt cannot be spent on other things.

anonymous · Answer

D. Is the most logical answer in my opinion.

A. The budget has very little to do with the actual debt itself. In so much as Austerity measures or spending programs can be undertaken either way. 

B. Prices rise for many different reasons such as inflation, commodity rarity, consumer demand, etc etc. There would be little reason other then runaway inflation that would cause the national debt to be the main culprit.

C. Definitely not true governments with high debt loads are usually great investments during privatization attempts. In Greece Chinese companies and many American companies are snapping up valuable property on the cheap.

Though several of the others could be debatable depending on context. I would imagine they are seeking a specific answer from the text given.

anonymous · Answer

One major problem of having a large national debt is that it makes the country dependent on other countries, weakening it's power