Problem
1. Why might economists be quite concerned if the annual interest payments on the debt sharply increased as a percentage of GDP?
2. Trace the cause-and-effect chain through which financing and refi nancing of the public debt might affect real interest rates, private investment, the stock of capital, and economic growth. How might investment in public capital and complementarities between public capital and private capital alter the outcome of the cause-effect chain?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.