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What tends to happen when countries carry large amounts of debt?

User BerndK
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Final answer:

When countries carry large amounts of debt, they may face difficulties in borrowing money in the future, high inflation or default on international loans, and a lack of economic growth due to unproductive investments.

Step-by-step explanation:

When countries carry large amounts of debt, several negative consequences tend to occur. Firstly, the country's ability to borrow money in the future is greatly affected due to a lack of confidence from investors and lenders. This can lead to a scenario of less investment, a depreciated exchange rate, widespread bank failure, and deep recession. Secondly, there is a risk of high inflation or a default on repaying international loans, which can worry international investors and result in a lower rate of return on their investments. Lastly, if a country does not invest the incoming funds from abroad in a way that leads to increased productivity, it can face difficulties in repaying the borrowed money when economic conditions change.

User Wieland
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