Which of the following is true?
A) National debt is not a burden if it is held by overseas interests.
B) National debt redistributes income from taxpayers to those holding government
Securities.
C) National debt increases when the RBA buys securities from the government.
D) National debt imposes an unfair burden on the current generation.

Question

Quizplus · Accepted Answer

National debt essentially involves the government borrowing money from investors through the sale of government securities, such as bonds. These investors receive interest payments in exchange for lending the money. As a result, national debt redistributes income from taxpayers (who ultimately have to repay the debt with interest) to those holding government securities. This can be seen as a transfer of wealth from the public to private investors who are typically wealthier.

Which of the Following Is True