Suppose the U.S. government decides to pay off all of its debt. Which of these would NOT be a consequence of this action?
A) Inflation would go up if the government had to "print money" in order to repay its debt.
B) Income would be redistributed to the poor because lower-income individuals tend to own more government bonds than the average taxpayer.
C) People would need to find new places to put their savings that were previously in government bonds.
D) The Federal Reserve would not be able to increase the money supply by buying risk-free securities.
Correct Answer:
Verified
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