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 decreased during the period.
B) Foreign ownership of U.S. Treasury securities must have fallen during the period.
C) Government interagency borrowing must have increased during the period.
D) Foreign ownership of U.S. Treasury securities must have risen during the period.
Question 2
Assuming that Yd = 20,000 and C = 22,000, we would find that the average propensity to consume would be equal to
A) 0.8. B) 1.8. C) 1.1. D) 0.9.
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