Under What Condition Can the U

question 19

Multiple Choice

Under what condition can the U.S.government continue to pay interest on a rising debt without eventually needing to increase the average tax rate?

• A) If the national debt grows at the same rate as nominal GDP
• B) If the nominal interest on the national debt grows faster than nominal GDP
• C) If the total interest payments on the national debt grow faster than nominal GDP
• D) If the national debt grows faster than nominal GDP
• E) If the real interest on the national debt grows faster than real GDP.

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Definitions:

Vivid Mental Images

Highly detailed and clear mental pictures generated by the mind, often used in memory and creative processes.

Motivated Forgetting

A psychological theory suggesting that people are more likely to forget information that causes emotional distress or anxiety.

Memories Retrieved

Refers to the process of recalling information that has been previously stored in memory.

Hippocampus

A region of the brain integral to memory formation, spatial navigation, and the processing of emotional responses.