Other Things Equal, an Increase of Corporate Bonds from $140

question 252

Multiple Choice

$$\begin{array} { | l | c | } \hline \text { Security } & \text { Amount (in Billions) } \\\hline \text { Treasury Bills } & \$ 220 \\\hline \text { Corporate Bonds } & 140 \\\hline \text { Treasury Notes } & 80 \\\hline \text { Corporate Stock } & 200 \\\hline \text { US Savings Bonds } & 60 \\\hline \text { Treasury Bonds } & 100 \\\hline\end{array}$$ Other things equal, an increase of corporate bonds from $140 billion to $150 billion in the economy would

• A) not change the size of the public debt.
• B) increase the public debt from $460 billion to $470 billion.
• C) increase the public debt from $600 billion to $610 billion.
• D) decrease the public debt by $20 billion.

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Definitions:

Government Revenue

The total income received by the government from taxes, fees, fines, and other sources to finance public services and goods.

Latte

A coffee drink made with espresso and steamed milk, often enjoyed for its creamy texture and rich flavor.

Quota

A limited quantity of a particular product that under official controls can be produced, exported, or imported.

Excise Tax

A tax charged on specific goods and services, such as tobacco and alcohol, often imposed to discourage their use or to generate revenue.