At the time it occurs,external financing of the debt allows the economy to
A)Consume beyond the production possibilities curve.
B)Reduce the deficit ceiling.
C)Export more goods and services.
D)Reduce the size of the national debt.

Question

Quizplus · Accepted Answer

External financing of the debt allows the economy to consume beyond the production possibilities curve by providing additional funds for investment or consumption that are not constrained by current domestic production levels. However, this can also increase the size of the national debt in the long run.

At the Time It Occurs,external Financing of the Debt Allows