Question

During an especially difficult year of weakening financial conditions, the government of Geriva, a European nation, borrows money to meet its financial obligations. However, once the borrowed amount reaches a certain limit, the government is not allowed to borrow more money. If this was to happen in the United States, it could be said that this is because the government has hit the _____.

Answer 1

Answer:

debt ceiling

Explanation:

Debt ceiling is the maximum limit which the government of the United States may borrow to meets its legal obligation. The law regarding the debt ceiling was created in 1927 under the Second Liberty act. It is also known as the debt limit and was created to make the President responsible for fiscal debt. United States of America is the only country where the debt national treasury is limited by legislatively.