The real burden of an increase in the public debt
A) may be very small or conceivably zero when the economy is in a severe depression.
B) will be smaller when full employment exists than when the economy has large quantities of idle resources.
C) can be shifted to future generations if the debt is internally ﬁnanced.
D) can best be measured by the dollar increase in the size of the debt.

Question

Quizplus · Accepted Answer

When the economy is in a severe depression, the increase in public debt can stimulate economic activity, potentially offsetting the burden of the debt.

The Real Burden of an Increase in the Public Debt