It Is Important to Distinguish Between the Privately Held Portion

question 68

Multiple Choice

It is important to distinguish between the privately held portion of the national debt and the portion held by government agencies and the Federal Reserve system because

• A) the government will not have to repay the privately held debt.
• B) only the privately held debt creates a net interest liability for the federal government.
• C) the privately held debt does not create a net interest liability for the federal government.
• D) taxes will have to be raised in order to pay the interest on the debt held by the Federal Reserve system.

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