If All US Government Bonds Are Held by U

question 36

Multiple Choice

If all U.S. government bonds are held by U.S. citizens, then

• A) the bondholders earn no interest income.
• B) there is no tax liability for funding the debt.
• C) there is no net change in national wealth when the national debt changes.
• D) the tax liability for funding the debt is not offset by the interest earnings of bondholders.
• E) government bonds are worthless.

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