If a country has a budget deficit, and this situation persists for a long time, what will be its result?
Increasing debt
A budget deficit means government expenditure is greater than government receipts.
The gap is financed mainly by borrowing, from the public, banks or abroad.
If deficits continue year after year, borrowings and interest payments keep piling up, so the public debt of the country keeps rising.
Hence, Increasing debt.
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