A public debt which is owed to foreigners can be burdensome because: a foreign interest rates are persistently higher than domestic interest rates b payment of interest reduces the volume of goods and services available for domestic uses c payment of interest will conflict with a nation's foreign aid programs d payment of interest will necessarily have a deflationary effect on prices in the paying nation e payment of interest will necessarily have an inflationary effect on prices in the paying nation

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Mercer

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30 September, 14:07

A public debt which is owed to foreigners can be burdensome because: a foreign interest rates are persistently higher than domestic interest rates b payment of interest reduces the volume of goods and services available for domestic uses c payment of interest will conflict with a nation's foreign aid programs d payment of interest will necessarily have a deflationary effect on prices in the paying nation e payment of interest will necessarily have an inflationary effect on prices in the paying nation

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Eleanor Griffin · Answer 1

A public debt owed to foreigners can be burdensome because B) payment of interest reduces the volume of goods. This can usually be seen illustrated in the form of a nation lending another nation money. The debt is public because the whole nation takes it on. The lending nation then is lacking in terms of use by the lending nation.