Which of the Following Is True of the Portion of the Net

question 137

Multiple Choice

Which of the following is true of the portion of the net public debt held by foreign residents?

• A) It will definitely be a benefit to current and future generations of U.S residents, because foreign residents have shown a willingness to lend to the U.S. government in exchange for rates of return significantly lower than they can receive elsewhere in the world.
• B) It will definitely be a burden on current and future generations of U.S. residents who will have to pay interest on this portion of the debt, thereby transferring a portion of future U.S. incomes abroad.
• C) It will be a burden on future generations of U.S. residents only if funds that the U.S. government obtains from borrowing are expended on projects with rates of return lower than the rates of interest that the government pays foreign residents.
• D) It will be a benefit to future generations of U.S. residents only if funds that the U.S. government obtains from borrowing are expended on projects with rates of return lower than the rates of interest that the government pays foreign residents

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Definitions:

Exposure

The extent to which a company or individual is vulnerable to potential loss or damage, often in the context of financial investments or market fluctuations.

Public Institutions

Organizations established and funded by governments to perform public services or functions, such as education, healthcare, and public safety.

Economic Aims

The goals or objectives that an organization or government seeks to achieve to ensure economic growth, stability, and prosperity.

Social Aims

Objectives that relate to societal challenges or goals, focusing on contributions towards the welfare of communities and the environment.