How can heavy federal debt lead to higher interest rates ?

A) the government causes increased borrowing competition which leads banks to increase interest rates

B) the government spends more money by borrowing which causes a rise in prices

The government causes increased borrowing competition which leads banks to increase interest rates ( A )

Explanation:

when the federal debt is heavy it leads to the federal government pushing more money into the economy and this act leads to inflation ( increase in the price of goods and services without the corresponding increase in the purchasing power ). since the purchasing power i.e the value of the currency is low the rate of Borrowing will increase in order to meet up with the current prices in the market.

The increase in borrowing competition will lead to the banks increasing the interest rates of the loans in order to make profits as well.

the reason the welfare system causes so much of a burden on its recipients is because the welfare system does not give its recipients any real tools to actually get out of poverty. the welfare system has embedded poverty deeper into society and has made it harder and harder for people to escape poverty.

in other words, it stoped the poor, and now its making it worse.

hope this . : )      

and im sorry it took so long for your question to get answered

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