If the net public debt remains unchanged during a given period, but the gross public debt increases, then which of the following statements must be correct?
A) Government interagency borrowing must have increased during the period.
B) Government interagency borrowing must have decreased during the period.
C) Foreign ownership of U.S. Treasury securities must have risen during the period.
D) Foreign ownership of U.S. Treasury securities must have fallen during the period.

Question

Quizplus · Accepted Answer

If the gross public debt increases while the net public debt remains unchanged, it implies that the government has increased its borrowing from within its own agencies. This internal borrowing does not affect the net public debt, as it is essentially the government owing money to itself, but it does increase the gross public debt.

If the Net Public Debt Remains Unchanged During a Given