18) If the national debt rises to the debt ceiling and there is currently a budg

Question

18) If the national debt rises to the debt ceiling and there is currently a budget then the debt ceiling or else the federal Congress and the President must agree to government will have insufficient funds to pay its bills and will be forced to shut down. a) surplus, lower b) deficit, raise c) deficit, lower d) None of the answers above are correct 9) Most of the U.S. national debt is owed to Thus a rising national debt implies that there will be a future redistibution of wealth from taxpayers to a) foreigners, foreigners. b) other U.S. citizens, bondholders c) foreigners, those needing govenment services d) other U.S. citizens, those needing govemment services 0) Crowding out occurs when the federal government a) raises taxes to finance a budget deficit b) refinances maturing U. S. Treasury bonds ci borrows by selling bonds to finance a deficit d) uses a budget surplus to pay off part of the national debt

Explanation / Answer

Ans:

18) Option B

deficit , raises

When the national debt raises to debt ceiling then government will rise the budget ceiling and this budget deficit overcome by selling treasury bills,notes,bonds.

19) Option B

Other U.S. citizens, bondholders

U.S. national debt is owed to Other U.S. citizens which may require redistribution of income to bondholders.

20) Option C

borrows by selling bonds to finance a deficit.

Crowding out means when federal government deficit is financed by borrowing , this increases interest rates and reduces private spending.

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