When Government Debt Is Financed Internally, Future Generations Will

question 33

Multiple Choice

When government debt is financed internally, future generations will

• A) inherit a higher tax liability without additional interest income.
• B) inherit neither higher taxes nor additional interest income.
• C) inherit both higher taxes and additional interest income.
• D) receive lower interest income and a lower tax liability.

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Definitions:

Liability

The legal obligation to answer for one's actions, chiefly in matters concerning debts or legal responsibilities.

Misrepresentation

The act of providing false, misleading, or incorrect information about a material fact, intentionally or unintentionally, leading another to act to their detriment.

Agent's Liability

The legal responsibility an agent may have for their actions or omissions in the course of their agency relationship.

Falsehood

A statement that is untrue, misleading, or inaccurate.