Which of the Following Statements Is TRUE About the Public

question 130

Multiple Choice

Which of the following statements is TRUE about the public debt and future generations?

• A) Future generations will always be worse off because they will have to pay off the public debt.
• B) Increased consumption today will lead to increases in the capital stock in the future.
• C) Future generations may be better off if the rate of return on the borrowed funds is higher than the interest rate paid to foreign residents.
• D) The public debt cannot be held by foreign residents therefore we really owe the debt to ourselves.

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