Suppose the government borrows to purchase military ammunition which is immediately used up in target practice.The rate of return on this investment is ________,and in this case the government debt ________ a burden on future taxpayers.

Question

Quizplus · Accepted Answer

The rate of return on military ammunition used in target practice is negative (-r) because it does not generate future income or economic growth. Therefore, the government debt incurred to purchase this ammunition is a burden on future taxpayers, as they will have to repay the debt without any associated economic benefits.

Suppose the Government Borrows to Purchase Military Ammunition Which Is