Question

What does debt mean?
How does debt affect the development of a country? (Explain this in your OWN words)

Answer 1

Answer:

Whether in the private sector or government, a debt crisis in one country can and frequently does spread economic pain to other countries. This can happen through a tightening of financial conditions such as a spike in interest rates, a slowdown in trade and economic growth, or merely a steep decline in confidence.

Answer 2

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Explanation:

Increasing the debt allows government leaders to increase spending without raising taxes. Investors usually measure the level of risk by comparing debt to a country's total economic output, known as gross domestic product (GDP). The debt-to-GDP ratio gives an indication of how likely the country can pay off its debt.