3Y: Economic Indicators - National Debt

Question 1

What is National Debt?

Answer 1

National Debt is the total amount of money that a countrys government has borrowed.

Question 2

What is Debt Servicing?

Answer 2

Debt Servicing is the term used to describe the payment of interest on our National Debt.

Question 3

What is the state body that managed the National Debt?

Answer 3

The state body that manages the National Debt is National Treasury Management Agency (NTMA).

Question 4

What is the Impact of National Debt on Households? (2)

Answer 4

1. Taxes may increase to help fund the repayment.
2. Government spending may be reduced.

Question 5

What is the Impact of National Debt on Businesses? (4)

Answer 5

1. Taxes may increase.
2. Less disposable income will result in less spending.
3. Reduced cosumer demand could result in job losses.
4. Negative economic climate will reduce business investment.

Question 6

What is the Impact of National Debt on Economy? (2)

Answer 6

1. Services are likely to be cut.
2. Debt has a significant opportunity cost.