Which of the Following Is True of Debt Financing

question 149

Multiple Choice

Which of the following is true of debt financing?

• A) Elected political officials will find debt financing attractive because it allows them to provide voters with visible current benefits while pushing the more visible costs into the future.
• B) Debt financing is unattractive to elected political officials because voters recognize that excessive debt will lead to the future collapse of the economy.
• C) Debt financing is attractive to elected political officials because countries with a higher debt to GDP ratio generally grow more rapidly.
• D) Elected political officials will be reluctant to run budget deficits  because they recognize that taxes will have to be raised in the future to pay the interest on the larger amount of outstanding debt.

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Definitions:

Negative Self-Talk

Negative self-talk refers to the inner dialogue that brings down personal abilities or self-worth, often leading to decreased motivation and negative outcomes.

Positive Self-Talk

The practice of making affirmative or supportive statements to oneself, often aimed at boosting confidence or morale.

Cognitive Therapy

A form of psychotherapy that aims to change negative patterns of thinking to improve a person's mood and behavior.

Solution-Focused Therapy

A form of psychotherapy that emphasizes finding solutions in the present time and exploring one’s hope for the future to find quicker resolutions of one's problems.