Government debt has no influence on interest rates in an economy.Question 12Answera.Trueb.False

The impact of government debt on the economy includes:Question 27Answera.Influencing interest rates and crowding out private investmentb.Shifting monetary policy goalsc.Changing labor market conditionsd.Determining exchange rates and trade balances

Suppose the government of a country has a high level of debt. Which of the following statements about this debt is false?a.If all the debt was in the form of bonds owned by the country's own citizens, then the debt would not be a burden to the country's taxpayers.b.If all the debt was in the form of bonds owned by the country's own citizens, then the debt would not be a burden to the country's citizens.c.A high debt might make lenders worry if the government could repay its loans and so raise the interest rate people wanted when they lent to itd.A high debt would make it difficult for the government to respond to any future downturns in its economy with expansionary fiscal policy.Clear my choiceQuestion 2Not yet answeredMarked out of 1.00Flag questionQuestion textThe government spending multiplier is _____________.a.indirectly proportional to the MPCb.Lower than the tax revenuec.directly proportional to the MPCd.Higher than the MPCClear my choiceQuestion 3Not yet answeredMarked out of 1.00Flag questionQuestion textThe higher is the MPS, _____________.a.Lower is the multiplier.b.Higher is the investment spendingc.Higher is the equilibrium income.d.Higher is the multiplierClear my choiceQuestion 4Not yet answeredMarked out of 1.00Flag questionQuestion textThe function of investment spending shifts to the left when __________.a.The interest rate risesb.The interest rate fallsc.Business expectations improved.Business expectations get worseClear my choiceQuestion 5Not yet answeredMarked out of 1.00Flag questionQuestion textWhich of the following is a the monetary policy instrument?a.An increase in direct taxesb.Open-market operationsc.Freezing pensionsd.A cut in government purchase of goods and servicesClear my choiceQuestion 6Not yet answeredMarked out of 1.00Flag questionQuestion textWhich of the following is not an instrument of fiscal policy?

True or False QuestionTrue or false: The interest rate is a mechanism that perfectly rations capital to its most productive uses.True false question.TrueFalse

The potential consequences of increasing government debt levels on the economy:Question 13Answera.Reduced inflation and higher employment ratesb.Lower interest rates and increased private investmentc.Future generations facing higher taxes or reduced government spendingd.Enhanced economic growth and stable exchange rates

Question 1Which of the following is true about government debt?1 pointMost of the US government debt must be paid back to foreign entitiesMost of the US government debt must be paid back to its citizensGovernment debt is risk-freeGovernment debt is typically less risky than corporate debt b) and d) are true about government debt