An Increase in the Public Debt and Its Subsequent Repayment

question 114

Multiple Choice

An increase in the public debt and its subsequent repayment will tend to:

• A) Mildly reduce the income inequality in the U.S.
• B) Mildly increase the income inequality in the U.S.
• C) Have no impact on the income distribution in the U.S.
• D) Make the income distribution more equitable in the U.S.

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Definitions:

Substitutes

Goods or services that can replace each other in use, where an increase in the price of one leads to an increase in demand for the other.

Inferior Good

A type of good for which demand decreases as the income of consumers increases.

Demand Curve

A diagram that shows how the quantity of a product demanded by buyers changes according to its price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase at various prices.