CAIE A-Level Economics 5.2.3 National Debt

CAIE A-Level Economics 5.2.3 National Debt
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise defining national debt as accumulated government borrowing, interpreting debt-to-GDP evidence and analysing interest burdens, crowding out and future fiscal constraints.

How this is tested

  • distinguish accumulated national debt from the annual budget deficit and debt-interest flow
  • interpret debt relative to GDP when judging whether government borrowing is substantial
  • explain crowding out or a larger future tax and interest burden after debt increases

Question 24

[Maximum number: 1]

What is the most likely consequence when there is an increase in the national debt?

A

the creation of additional money

B

a current account deficit on the balance of payments

C

a surplus in the government's budget

D

the crowding out of private sector investment