Think of a country like a person who borrows money to buy things, toys, food, or even a new house. If they keep borrowing and never pay back the full amount, their debt gets bigger and bigger. That’s what happens in some countries: they borrow more than they can afford, and now they owe a lot of money to other people or countries.
Examples
- Your school buys new computers with a loan and promises to pay it back later, but they keep borrowing more instead.
- You borrow $10 from your friend, but after three months you still haven’t paid them back.
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See also
- What are debt cycles?
- What If Everyone in USA Stopped Paying Taxes?
- How do interest rates affect the economy and our daily lives?
- How Does the Greenback Work in Modern Economics?
- How do lotteries work and what are their economic impacts?