The Treasury Can Retire Part of the National Debt Only

question 28

Multiple Choice

The Treasury can retire part of the national debt only when

• A)it can convince the Fed to buy government securities from the public
• B)it can issue new securities to replace the ones that are maturing
• C)federal government tax revenues exceed outlays
• D)the structural component of the budget surplus is positive
• E)the economy is at the full-employment level of output

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Definitions:

Supply and Demand

A fundamental economic model that describes the relationship between the availability of a product or service and the desire for it among consumers.

Markup Percentage

The ratio of profit added to the cost price of goods to determine the selling price, expressed as a percentage of the cost.

Markup Percentage

Markup Percentage is the difference between the cost of a product or service and its selling price, expressed as a percentage of the cost, used to determine the selling price.

Wholesale Price

The cost of goods sold in bulk to retailers or distributors, typically lower than retail prices.