External debt of the United States refers to O The ownership of nongovernment debt by the government. O The debt of nongovernment organizations. O Combined foreign debt held by sources outside the U.S. government. D O U.S. government debt held by foreigners.

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QUESTION 32 Reasonable uses of debt include all the following EXCEPT O a. to purchase a car. O b. to buy a house. O C. to fund other investments. O d. to cover a budget deficit. e to finance an education,

. What are the three general options available to the U.S. to begin to reduce the relative size of our national debt as a percent of GDP?

aget TRUE - OR - FALSE The amount the government owes to the public is the deficit. O True O False

Suppose real GDP is constant. If the government's fiscal policy objective is to reduce the outstanding public debt, the government must: Have a structural primary budget surplus that is larger than its interest payments on the public debt O b. None of the answers is correct Oc Have a structural budget surplus equal to the outstanding public debt O d. Sell new bonds in the open market

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12. The national debt in the current year is equal to the national debt at the beginning of the year minus the annual budget deficit. a. b. equal to the national debt at the end of the year plus the annual budget deficit. equal to the national debt at the beginning of the year plus the annual budget deficit. C. d. none of the above. H. I

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It can be argued that a government budget deficit, rather than being a burden for future generations, may provide net benefits to future generations. This view is correct if the current budget deficit is used to... O a Pay transfers such as welfare and old age pensions in the present period. O b. Ensure that all interest paid goes to residents rather than foreigners. O c. Finance projects that deliver long-term benefits to society. O d. Invest in the purchasing of goods not available in the local economy O e. Pay subsidies to Canadian firms to offset rising energy costs.