Media reports often suggest that the increasing public debt is a burden on future generations. What they mean is that
A) it reduces the current level of investment.
B) it makes predicting future unemployment levels unpredictable.
C) it causes deflation.
D) it reduces both nominal and real interest rates.

Question

Quizplus · Accepted Answer

Increasing public debt means that the government has to spend more on servicing the debt rather than investing in productive projects. This reduces the level of investment, which can have negative effects on future economic growth and prosperity. Therefore, the increasing public debt can be a burden on future generations. B, C and D are not directly related to the burden of public debt on future generations.

Media Reports Often Suggest That the Increasing Public Debt Is