Author Question: Which of the following statements is TRUE about the public debt and future generations? A) Future ... (Read 445 times)

dmcintosh · **on:** Jun 29, 2018

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.

Question 2

A theory or a model

A) is a simplified, abstract view of reality.
B) is based on each economist's value judgments.
C) is a detailed analysis of what ought to be.
D) captures all aspects of the real world.