Which of the following statements is true about the public debt and future gener

Question

Which of the following statements is true about the public debt and future generation?

a. Increased consumption today will lead to increases in the capital stock in the future

b. Future generations will always be worse off because they will have to pay off the public debt

c. Future generations may be better off if the rate of return on the borrowed funds is higher than the interest rate paid to foreigners

d. The public debt cannot be held by foreigners therefore we really owe the debt to ourselves.

Explanation / Answer

d. The public debt cannot be held by foreigners therefore we really owe the debt to ourselves.

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