Which of the Following Is a Valid Concern About the National

question 44

Multiple Choice

Which of the following is a valid concern about the national debt for a country whose debt is held entirely by its citizens?

• A) The welfare of future generations will be directly related to the per-capita size of the national debt that they inherit.
• B) Growth of the national debt will eventually lead to the bankruptcy of the government.
• C) When the debt comes due, future generations may be unable to pay it off.
• D) If the increases in the national debt reduce private expenditures on capital formation, future generations may have lower incomes because they will inherit a smaller stock of capital.

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Definitions:

Income Statement

A financial report that shows a company's revenues, expenses, and profit or loss over a specific period.

LIFO

"Last In, First Out," an inventory valuation method where the most recently acquired items are the first to be sold, affecting cost of goods sold and inventory valuation.

FIFO

"First In, First Out," an inventory valuation method where goods first added to inventory are the first to be sold or used.

Gross Profit

A company's revenue minus its cost of goods sold, indicating the efficiency of its core operation excluding overhead.