If the national debt is owned by domestic citizens,
A. the debt will not have to be repaid.
B. future interest payments transfer funds from one group of Americans to another.
C. the debt will have to be repaid first to domestic creditors, then to foreign creditors.
D. future interest payments will go to pay foreign debt first, then debt owed to American citizens.
Answer: B
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The natural rate hypothesis states that when the inflation rate ________, in the short run the unemployment rate ________ and in the long run the unemployment rate ________
A) falls, decreases; decreases B) rises, decreases; returns to the natural unemployment rate C) falls, increases; decreases D) falls, decreases; returns to the natural unemployment rate E) rises, decreases; decreases
Suppose that after five solid years of economic growth, Eurekaland begins to experience inflationary pressures due to strong consumer and investor confidence. If Eurekaland's Central Bank wants to prevent inflation from becoming a major problem, which of the following actions should it take?
A) It should reduce the money supply to push interest rates higher. B) It should increase the money supply to push interest rates higher. C) It should reduce the money supply to push interest rates lower. D) It should increase the money supply to push interest rates lower.