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How does public debt make our money worth less?


Inflation mechanism: If the government issues extra money and credit, prices of goods and services will go up accordingly.

Inflation mechanism: If the government issues extra money and credit, prices of goods and services will go up accordingly.

PUBLIC debt is defined as how much a country owes to lenders.

It can be categorised as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Another common division of government debt is by duration until repayment is due. Short-term debt is generally considered to be for one year or less, long-term is for more than 10 years. Medium-term debt falls in between these two boundaries.

Economy , Anthony Dass

   

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