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How a country becomes default? A country becomes default when it is unable to pay its debts on time. This can happen for a variety of reasons, such as an economic downturn, a mismanaged government budget, or external factors such as a natural disaster. When a country defaults, it typically means that it has missed a payment on a loan or bond that it has issued. This can lead to a number of consequences, including: Credit rating downgrades: A default can lead to credit rating agencies lowering the country's credit rating, which can make it more difficult for the country to borrow money in the future. Market turmoil : A default can cause uncertainty and volatility in financial markets, leading to a decline in the value of the country's currency and assets. Increased borrowing costs: A default can lead to an increase in the interest rates that the country must pay on its future borrowing, making it more expensive to service its debts. Legal consequences : A default can lead to l...

  Effects of default of a country on Citizen: A default by a country on its debts can have a number of consequences for its citizens. Some potential effects of a default on citizens include: Economic downturn: A default can lead to an economic downturn, as it can cause market turmoil and reduce investor confidence, leading to a decline in the value of the country's currency and assets. This can lead to a reduction in economic activity, leading to higher unemployment and lower incomes for citizens. Inflation: A default can lead to an increase in the cost of borrowing for the country, which can result in higher interest rates. Higher interest rates can lead to an increase in the overall price level, leading to higher inflation. This can erode the purchasing power of citizens' incomes. Austerity measures: In order to address a default situation, a country may need to implement austerity measures such as spending cuts, tax increases, or other measures to improve its fiscal position...