Which of the Following Statements Is True

question 22

Multiple Choice

Which of the following statements is true ?

• A) The national debt is the current year's amount by which the government is spending more than it collects in taxes.
• B) Deficits are financed by the government issuing for sale more government securities.
• C) The debt ceiling refers to the amount of debt at which the government is officially declared as being bankrupt.
• D) Internal national debt is the portion of the national debt owed to foreigners.

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Definitions:

Implementation Lag

The time needed to introduce a change in monetary or fiscal policy.

Recognition Lag

The time it takes for policymakers to identify an economic issue or trend that requires intervention.

Active Policy

Economic strategies and measures actively implemented by a government to influence the economy, such as adjusting tax rates or spending.

Decision-making Lag

The delay between recognizing an economic issue and implementing policy actions to address it.