Which of the following is an important real consequence of the public debt of the United States?
A) It will threaten to bankrupt the federal government.
B) It discourages saving among the general public.
C) It decreases the inequality in the distribution of income in the U.S.
D) Its consequent higher interest rates lead to fewer incentives to bear risk and innovate.

Question

Quizplus · Accepted Answer

The public debt of the United States leads to higher interest rates, making it more expensive to borrow money. This can have a negative impact on business investment, as higher interest rates mean fewer incentives to bear risk and innovate. It does not threaten to bankrupt the federal government or decrease inequality in the distribution of income, and there is no clear evidence that it discourages saving among the general public.

Which of the Following Is an Important Real Consequence of the Public