The U.S.federal debt that accumulated between 1970 and 2010
A)Caused significant economic damage to the U.S.economy.
B)Is an asset and a liability for the U.S.economy.
C)Occurred at the expense of the foreign sector.
D)Occurred without an increase in the size of the government sector.

Question

Quizplus · Accepted Answer

The U.S. federal debt that accumulated between 1970 and 2010 is both an asset and a liability for the U.S. economy. It is a liability because the government owes the money to its creditors, but it is also an asset because the government's creditors hold U.S. Treasury securities as an investment. However, it did not cause significant economic damage to the U.S. economy, nor did it occur at the expense of the foreign sector. The debt also occurred with an increase in the size of the government sector.

The USFederal Debt That Accumulated Between 1970 and 2010