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From course:

Economics A Level (DONEEEEEEE)

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Question:

What Problems can Excessive Borrowing lead to?

Author: eric_galvao



Answer:

-Demand pull Inflation as there is more Money in the Economy compared to Output. -Inflation then occurs, which may mean Interest Rates gets put up. Higher % Rates will Discourage Investment and make Currencies go Up in Value, making Exports Less Price Competitive


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