The opportunity cost of the debt is the change in the mix of output that occurs when public sector spending crowds out private sector spending.

Question

Quizplus · Accepted Answer

The opportunity cost of the debt refers to the foregone benefits or opportunities that result from the government's decision to use resources to finance the debt. In the case of public sector spending crowding out private sector spending, the opportunity cost is the change in the mix of output that occurs. Therefore, the statement is true.

The Opportunity Cost of the Debt Is the Change in the Mix