Question

Which of the following is not true with regard to the burden of the U.S. national debt?

a. Budget deficits are not appropriate for stabilization purposes under any circumstances.

b. The debt does burden future generations to the extent that it is sold to foreigners.

c. The debt will reduce the nation's capital stock if incurred during a fully employed economy.

d. The large deficits of the 1980s and early 2000 were particularly worrisome because they were not attributable to recessions.

Answer 1

The correct answer is "B".

The debt does burden future generation but not only to an extent that it is sold to foreigners but the whole amount will create a burden for future.  

Other options are correct. BUdgets are appropriate for stabilization process. The debt will cause inflation and cause a capital loss if raised in a fully employed economy. And deficit in the 1980s and 2000s was worrisome because it was not the recession time. Such debts increase the inflation in the economy.