Solved

Which of the Following Is True of Debt Financing

Question 101

Multiple Choice

Which of the following is true of debt financing?


A) Elected political officials will find debt financing attractive because it allows them to provide voters with visible current benefits while pushing the more visible costs into the future.
B) Debt financing is unattractive to elected political officials because voters recognize that excessive debt will lead to the future collapse of the economy.
C) Debt financing is attractive to elected political officials because countries with a higher debt to GDP ratio generally grow more rapidly.
D) Elected political officials will be reluctant to run budget deficits  because they recognize that taxes will have to be raised in the future to pay the interest on the larger amount of outstanding debt.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents