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An Increase in the National Debt Creates a Burden on Future

Question 12

Multiple Choice

An increase in the national debt creates a burden on future generations because


A) the government will have to sell off its assets to pay off the debt
B) future tax rates will have to be increased to pay off domestic government bondholders
C) the Fed will have to monetize the debt, which will lead to higher interest rates
D) the capital stock will be lower than it would have been without the debt increase
E) interest payments on the national debt will increase the primary deficit even further

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