Which of the following statements is true of the global debt crisis?
A)Fiscal imbalances are the least important source of risk and uncertainty in the global business environment.
B)The smallest proportion of government debt results from national pension and healthcare programs.
C)Debt has substantially decreased in major advanced economies mainly due to excessive government spending.
D)When a government tries to pay down its debt, money is drawn out of the national money supply, which hinders economic activity and reduces tax revenues.

Question

Quizplus · Accepted Answer

When a government tries to pay down its debt, it may lead to a reduction in the national money supply, as money is drawn out of the economy. This can have a negative impact on economic activity and reduce tax revenues, which in turn can make it difficult for governments to meet their debt obligations.

Which of the Following Statements Is True of the Global