Which of the Following Is an Important Real Consequence of the Public

question 313

Multiple Choice

Which of the following is an important real consequence of the public debt of the United States?

• A) It will threaten to bankrupt the federal government.
• B) It discourages saving among the general public.
• C) It decreases the inequality in the distribution of income in the U.S.
• D) Its consequent higher interest rates lead to fewer incentives to bear risk and innovate.

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Definitions:

Corporation

A legal entity that is separate from its owners, who share limited liability protection, and is recognized by law as having rights and responsibilities.

Profit

The right to go onto someone’s land and take part of the land or a product of it away from the land.

S Corporation

A special designation granted by the IRS to small businesses that allows them to pass corporate income, credits, and deductions through to shareholders, avoiding double taxation.

Taxed

Subjected to a financial charge or levy by a governmental organization in order to fund various public expenditures.