The Idea That a Large National Debt Is "Mortgaging the Future

question 37

Multiple Choice

The idea that a large national debt is "mortgaging the future of our children and grandchildren" is misleading because:

• A) it is the Federal Reserve that will be responsible for making interest payments on the debt.
• B) future generations will have to bear the opportunity costs of the resources that are used today.
• C) future generations will not be liable for the interest obligations of the national debt.
• D) future generations will inherit the interest income as well as the interest obligations.

---

Definitions:

Interest Rates

The percentages at which money is borrowed or lent, serving as a critical economic indicator and tool for monetary policy.

Treasury-Bond Futures

Treasury-bond futures are futures contracts based on the future value of U.S. Treasury bonds, used to hedge against or speculate on changes in interest rates.

S&P 500 Index Futures

Financial contracts that speculate on the future value of the S&P 500 index, allowing investors to bet on the direction of the stock market.

Buy

The action of acquiring ownership in a financial asset with the expectation that its value will increase over time.