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

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?

The national debt is equal to which of the following?ResponsesThe value of all government bonds held by the nation’s central bankThe value of all government bonds held by the nation’s central bankThe value of all loans in the nation’s banking systemThe value of all loans in the nation’s banking systemThe current government budget deficitThe current government budget deficitThe sum of all past government budget deficits and surplusesThe sum of all past government budget deficits and surplusesThe interest payments on the previous year’s government debt

Which of the following is NOT one of the qualities which makes debt attractive to firms?Select one:a. The required return on debt is lower because, from the lender's point of view, debt is less risky than equity.b. It reduces the amount of corporate tax payable by firms by reducing the amount of taxable profit.c. Debt interest only gets paid when the company is making a profit.d. The cost of debt is generally less than the cost of share capital and hence can lower the overall cost of capital for a firm.

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