If the Net Public Debt Remains Unchanged During a Given

question 129

Multiple Choice

If the net public debt remains unchanged during a given period, but the gross public debt increases, then which of the following statements must be correct?

• A) Government interagency borrowing must have increased during the period.
• B) Government interagency borrowing must have decreased during the period.
• C) Foreign ownership of U.S. Treasury securities must have risen during the period.
• D) Foreign ownership of U.S. Treasury securities must have fallen during the period.

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Definitions:

Floatation Costs

The comprehensive expenses involved in releasing new securities, encompassing fees for underwriting, legal services, and registration.

Firm Commitment

An underwriting agreement in which an underwriter agrees to buy all the unsold shares in an initial public offering (IPO).

Underwriter

A person or institution that assesses and accepts the risk on investments, insurance, or securities, often by buying or guaranteeing them.

Direct Costs

Direct costs are expenses directly tied to the production of a product or service, such as raw materials and labor.