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Questions: If people worried about the US defaulting on the national debt, what would you expect to happen to interest rates
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debt defaulting means we are unable to pay our debts or loans on time example a person has taken loan for his house now he don't have money to pay the installment of his loan it will be defaulting of his loan and creditor can take action against him.

similarly when government is not able to pay for his bonds or interest on his debts it leads to debt defaulting which affects the whole economy adversely.

if the U.S. government would default its debts then the interest rate on the U.S. treasury securities (bonds) will increase because if the government will refuse to pay interests on the bonds it will affect the whole credit system the money supply will decrease while the demand will be high so the interest rate on the borrowings will rise. the debt defaulting not only raises interest rates but also affects the other economy activities negatively.

answer: 2

U.S. treasury bond is an fixed investment with the full security from the risk and it is popular asset i world market due to the security provided by U.S. government from the risk.

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