Question 05-Difference between Individual and Government Debt. Three reasons government debt is different from individual debt are: • The government lives forever; people don't. • The government can print money to pay its debt; people can't. • Government owes much of its debt to itself- and to its own citizens. Does our federal government ever have to pay off its IOU's - that is, U.S. Treasury Bonds? True, the government can "print money", but what is the concern with this? Does the government really owe much of the debt to itself or U.S. citizens? Refer to the pie chart in on the last page of your student lecture notes - what percent of U.S. government debt is external debt (i.e., held by foreigners)?
Question 05-Difference between Individual and Government Debt. Three reasons government debt is different from individual debt are: • The government lives forever; people don't. • The government can print money to pay its debt; people can't. • Government owes much of its debt to itself- and to its own citizens. Does our federal government ever have to pay off its IOU's - that is, U.S. Treasury Bonds? True, the government can "print money", but what is the concern with this? Does the government really owe much of the debt to itself or U.S. citizens? Refer to the pie chart in on the last page of your student lecture notes - what percent of U.S. government debt is external debt (i.e., held by foreigners)?
Chapter3: Economic Decision Makers
Section: Chapter Questions
Problem 3.11P
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Step 1: Define Individual and Government Debt
VIEWStep 2: Does our federal government ever have to pay off its IOU's, that is, U.S. Treasury Bonds?
VIEWStep 3: True, the government can "print money", but what is the concern with this?
VIEWStep 4: (c) Does the government really owe much of the debt to itself or U.S. citizens?
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