Which of the following is a valid concern about the national debt for a country whose debt is held entirely by its citizens?
a. The welfare of future generations will be directly related to the per-capita size of the national debt that they inherit.
b. Growth of the national debt will eventually lead to the bankruptcy of the government.
c. When the debt comes due, future generations may be unable to pay it off.
d. If the increases in the national debt reduce private expenditures on capital formation, future generations may have lower incomes because they will inherit a smaller stock of capital.
D
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Under a fractional reserve banking system, banks are required to
(a) keep part of their demand deposits as reserves (b) expand the money supply when requested by the central bank (c) insure their deposits against losses and bank runs (d) pay a fraction of their interest income in taxes (e) charge the same interest rate on all their loans
Although the dominance of ________ over ________ is clear in all countries, the relative importance of bond versus stock markets differs widely
A) financial intermediaries; securities markets B) financial intermediaries; government agencies C) government agencies; financial intermediaries D) government agencies; securities markets