) If all the debt was in the form of bonds owned by the country’s own citizens, then the debt would not be a burden to the country’s taxpayers

If all the debt was in the form of bonds owned by the country’s own citizens, then the debt would not be a burden to the country’s citizens

A high debt might make lenders worry if the government could repay its loans and so raise the interest rate people wanted when they lent to it.

A high debt would make it difficult for the government to respond to any future downturns in its economy with expansionary fiscal policy.

A reduction in income tax rates.

An increase in firms’ non-labour costs.

A reduction in the benefits paid to unemployed people.

An increase in help for unemployed people to retrain.

Increase the school leaving age.

Discouraging firms from investing in new capital.

Make government departments more efficient.

Promoting competition.

Country A has a comparative advantage in cloth.

Country B has a comparative advantage in wheat

Country A has an absolute advantage in cloth.

Country B has an absolute advantage in wheat.

Country A will export cloth to B, and import wheat from B, and each country will be able to consume more of both products than before

Country A will export wheat to B, and import cloth from B, and each country will be able to consume more of both products than before

Country A will export cloth to B, and import wheat from B, but only country B will gain from the trade.

Country A will export wheat to B, and import cloth from B, but only country B will gain from the trade.