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Many students who study using our platform have reported that a large number of the practice questions here are very similar to those that appear in real exams. View Courses
Many students who study using our platform have reported that a large number of the practice questions here are very similar to those that appear in real exams. View Courses
Which of the following is most likely the impact of high national debt on a country?
Correct Answer: B. A decrease in social services provided to the public
When a country has high national debt, more government revenue goes toward paying interest rather than funding programs. To reduce spending, governments often cut public services such as healthcare, education, and welfare. This austerity measure helps manage debt levels but reduces public support systems and limits access to essential services for citizens.
Why Other Options are Incorrect:
A. A decrease in income taxes paid by businesses
High national debt typically leads to higher taxes, not lower. Governments often raise taxes on businesses and individuals to generate revenue for debt repayment, making this option inaccurate.
C. An increase in government investments in the private sector
Governments with large debts usually limit new investments to control spending. Increased private-sector investment would worsen debt instead of alleviating it, making this an unlikely outcome.
D. An increase in consumer confidence
High national debt tends to lower consumer confidence because it signals potential economic instability, inflation, or spending cuts, discouraging investment and household spending rather than boosting optimism.
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