If no foreign residents owned any of the U.S. public debt, then it would be true that
A) U.S. residents would essentially owe the public debt to themselves.
B) there would be no distributional consequences associates with he public debt.
C) there would be no interest payments on the public debt.
D) the public debt would naturally disappear over time.
A
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Describe the argument that education generates a positive externality. Why might this externality not be relevant in terms of economic efficiency?
What will be an ideal response?
A price ceiling is binding when it is set
a. above the equilibrium price, causing a shortage. b. above the equilibrium price, causing a surplus. c. below the equilibrium price, causing a shortage. d. below the equilibrium price, causing a surplus.
Suppose that a college physics experiment goes horribly wrong and releases an electronic pulse that renders all electronic equipment in the cities of Columbus, Cleveland and Cincinnati, Ohio permanently useless. No people are hurt, and no buildings are damaged. After the accident, the wages earned by Ohio workers will
a. increase because the marginal productivities of Ohio workers will increase. b. decrease because the marginal productivities of Ohio workers will decrease. c. decrease because the marginal productivities of Ohio workers will increase. d. increase because the marginal productivities of Ohio workers will decrease.
Other things the same, as the price level rises,
a. the dollar depreciates. b. the interest rate falls. c. people feel less wealthy. d. All of the above are correct.