If the national debt is owed to foreigners,
A)the debt constitutes a burden to domestic citizens.
B)economic growth will necessarily be higher than if the debt were owed to domestic citizens.
C)paying off the debt will involve a transfer of resources within the country.
D)future interest payments on the debt are not a burden to the nation.

Question

Quizplus · Accepted Answer

If the national debt is owed to foreigners, it means that the government has borrowed money from other countries or foreign institutions. As a result, future interest payments and the repayment of the debt itself will involve transferring resources out of the domestic economy and into the hands of foreign entities. This can place a burden on domestic citizens as it can lead to reduced investment in the country, increased interest rates, and ultimately slower economic growth.

If the National Debt Is Owed to Foreigners