Economics class: The US hit the debt ceiling. What happens next?

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Specification:

  • Fiscal policy

Click to read the article below and then answer the questions:

The US hit the debt ceiling. What happens next?

  • What is the debt ceiling?

  • Identify the components of fiscal policy

  • Distinguish between i) a budget deficit; and ii) national debt

  • With reference to the chart, compare the USA’s total debt outstanding during the period shown

  • ‘The Treasury may try to prioritise certain payments over others, chiefly interest and principal payments on the governments debt.’ Explain the opportunity costs associated with a growing national debt

  • What is Standard & Poor’s?

  • Discuss the implications of a US default

Gavin Clarke, Emmanuel College

This post was originally published on Financial Times

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