If the Net Public Debt Remains Unchanged During a Given

question 129

Multiple Choice

If the net public debt remains unchanged during a given period, but the gross public debt increases, then which of the following statements must be correct?

• A) Government interagency borrowing must have increased during the period.
• B) Government interagency borrowing must have decreased during the period.
• C) Foreign ownership of U.S. Treasury securities must have risen during the period.
• D) Foreign ownership of U.S. Treasury securities must have fallen during the period.

---

Definitions:

Direct-Financing Leases

Direct-Financing Leases are lease agreements where the lessor essentially acts as a financier, purchasing an asset and leasing it to the lessee, without assuming risk of ownership.

Capital Lease

A lease classified as a financial transaction where the lessee effectively buys an asset and finances it over the lease term.

Operating Lease

An agreement that permits the utilization of an asset without owning it, usually with a shorter duration than a finance lease.

Fair Value

What one would earn from selling an asset or what it would cost to shift a liability in a systematic operation with market actors on the appraisal date.