If the Majority of National Debt Is Held Domestically, Economists

question 93

Multiple Choice

If the majority of national debt is held domestically, economists would consider this not to be a burden because:

• A) we owe the debt to ourselves.
• B) it is only future generations that will have to repay the debt, not us.
• C) we can easily pay for this debt out of export income.
• D) the government knows how to spend the money better than us.

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Definitions:

Inflation

An economic condition characterized by a general increase in prices and fall in the purchasing value of money.

GDP Deflator

A measure of the price level for all domestically produced goods and services in an economy, indicating the rate of inflation or deflation.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate representation of an economy's size and growth.

Inflation

The rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of money.