Increases in the Fraction of National Debt Held by Foreigners

question 111

Multiple Choice

Increases in the fraction of national debt held by foreigners _____ the burden of debt service on future generations _____.

• A)decrease;because it is easier for the borrowing nation to default on the debt
• B)decrease;but may make the country more vulnerable to foreign intervention
• C)decrease;because debt servicing accomplished by increases in the money supply is not as inflationary as it would be if all debt were held domestically
• D)increase;because taxes to repay the debt are collected within the country but more interest payments on the debt are sent outside
• E)increase;because foreign bondholding pushes up interest rates at the date of issue,increasing crowding out

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Definitions:

Scanlon Plan

A participative management approach that focuses on improving productivity and sharing the resulting cost savings with employees.

Collective Stock Options

A form of employee incentive where groups of workers are granted options to buy company stock at a discounted price.

Profit-Sharing Plan

A company program that gives employees a share in the company’s profits based on its quarterly or annual earnings, serving as a tool to motivate and reward employees.

Employee Stock Ownership Plan

A program that provides a company's workforce with an ownership interest in the company through the acquisition of stocks.