The following are important problems associated with the public debt except A

The following are important problems associated with

  • Pasadena City College
  • ECON 1A
  • Notes
  • AIKOLI
  • 58
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125.The following are important problems associated with the public debt, except: A. Payments of interest on the debt lead to greater income inequalityB. Interest payments on the debt tend to reduce economic incentives to work and investC.Government borrowing to finance the debt may lead to too much private investmentD. Payment of interest on the debt held by foreigners would send real resources abroadAACSB: AnalyticBlooms: Level 1 RememberDifficulty: 2 MediumLearning Objective: 13-04 Discuss the size; composition; and consequences of the U.S. public debt.McConnell - Chapter 13 #125Topic: False Concerns126.A public debt which is owed to foreigners can be burdensome because: AACSB: AnalyticBlooms: Level 2 UnderstandDifficulty: 1 EasyLearning Objective: 13-04 Discuss the size; composition; and consequences of the U.S. public debt.McConnell - Chapter 13 #126Topic: False Concerns127.An increase in the public debt and its subsequent repayment will tend to: AACSB: AnalyticBlooms: Level 2 UnderstandDifficulty: 2 MediumLearning Objective: 13-04 Discuss the size; composition; and consequences of the U.S. public debt.McConnell - Chapter 13 #127Topic: False Concerns
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128.Crowding out is a decrease in private investment caused by: AACSB: AnalyticBlooms: Level 1 RememberDifficulty: 1 EasyLearning Objective: 13-04 Discuss the size; composition; and consequences of the U.S. public debt.McConnell - Chapter 13 #128Topic: False Concerns129.The crowding-out effect from government borrowing to finance the public debt is reduced when: A. The economy is experiencing a period of high inflationB. The economy is operating at the full-employment level of outputC.Public investment complements private investmentD. Public investment substitutes for private investmentAACSB: AnalyticBlooms: Level 2 UnderstandDifficulty: 2 MediumLearning Objective: 13-04 Discuss the size; composition; and consequences of the U.S. public debt.McConnell - Chapter 13 #129Topic: False Concerns
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