Question

There are six macroeconomic debates detailed in the textbook. Please pick one and make your case for or against the issue you have selected. Please demonstrate your now developed understanding of the issues at hand. One Topic is the tax cut from fiscal policies is the con,

Answer 1

The economy with a high fiscal default on GDP or a high debt-to-GDP ratio is not supposed to last for a long time. An increased debt-to-GDP ratio is unfavorable to foreign investors, which tends to decrease their confidence and harm their global reputation. This also questions the ability in the near future to recover the accumulated debt.

At the time of both World Wars, the United States was seen as economically stable. Such played an important role in crediting the countries that had been subjected to war. Ir was the world's greatest borrower, but until recently he had considered it to be one of the rising debtors with a 100% debt-to-GDP ratio. His state has become debl-trapped after the giant financial crisis. The deficit in the current account was higher. This rising inequality is supposed to place the economy in danger of a major crisis.It can trigger higher interest rates, lead to another recession (the economy is recovering), degraded living standards for households and will be more disruptive for the global economy due to its global linkages. The consolation is that the condition is alarimous but is not panic-sensitive. The foreign reserve currency is the US dollar, and therefore every lender must be appropriate to it. No problem at all is a debt-GDP ratio of 100% or above. Be mindful that the lenders will sceptically become wary of the government's ability to repay the debt under such a high debt-GDP ratio.
I expect that high inflation will reign in the near future because the government will seigniorate it for debt financing. Your demand for higher interest rates could force the government to announce its failure to comply with the debt. That is why a 100% debt-GDP ratio is no indiction of a financial crisis, as happened in the reglon Larin American countries of the 1980s and Rgentina 2002, following the crisis.