The real burden of an increase in the public debt:
A)may be very small or conceivably zero when the economy is in the midst of a severe depression.
B)will be smaller when full employment exists than it will when the economy has large quantities of idle resources.
C)can be shifted to future generations if the debt is internally financed.
D)can best be measured by the dollar increase in the size of the debt.

Question

Quizplus · Accepted Answer

When the economy is in a severe depression, increasing public debt can stimulate economic activity and reduce unemployment, thus the real burden may be minimal or zero.

The Real Burden of an Increase in the Public Debt