Is internally held public debt or externally held public debt less likely to be a problem? Explain
Internally held debt is less likely to be a problem, because the taxes paid by citizens to fund the interest
payments on the debt are offset by the receipt of those interest payments. Debt held by U.S. investors
means that future tax revenues to repay the debt are simply reshuffled within the economy. If the interest
payments on the debt go to foreigners, however, there is a redistribution of wealth from citizens to
foreigners, leaving the citizens less well off.
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Hyundai is a large South Korean company that produces finished steel products. Hyundai plans to buy raw steel from U.S. Steel. As a result, the
A) demand curve for U.S. Dollars shifts rightward. B) demand curve for U.S. Dollars shifts leftward. C) demand curve for South Korean Won shifts rightward. D) demand curve for South Korean Won shifts leftward.
Countries with a low standard of living have low levels of total factor productivity. List 5 reasons that account for the low levels of total factor productivity
What will be an ideal response?
Assume that targeted inflation is 1 percent. According to the Taylor rule, the federal funds rate is:
a. equal to 2 percent if inflation and output are at their target level. b. equal to 6 percent if inflation is 3 percent, output is at its target level and the Fed's targeted federal funds rate is 2 percent. c. equal to 4 percent if inflation is 2 percent , output is 2 percent above its target level and the Fed's targeted federal funds rate is 2 percent. d. none of the above are correct.
For a monopoly, a negative marginal revenue implies:
A. the price effect is larger than the quantity effect. B. total revenues are increasing. C. that the demand is price elastic. D. the quantity effect is larger than the price effect.