5. Which of the following statements are TRUE? (a) In a situation of a sovereign debt crisis Keynesian macroeconomic policy is unavailable because the government is practically unable to borrow. (b) Balancing the national government budget each year is sound macroeconomic policy (c) It is possible and preferable to balance the national government budget over the business cycle. (d) The national debt always implies mortgaging our children's future and thus government should seek to retire as much of this debt as possible. (e) The part of the national debt that is owed to other parts of the national government should not be counted as a problem since it involves the government owing money to itself.

5. Which of the following statements are TRUE? (a) In a situation of a sovereign debt crisis Keynesian macroeconomic policy is unavailable because the government is practically unable to borrow. (b) Balancing the national government budget each year is sound macroeconomic policy (c) It is possible and preferable to balance the national government budget over the business cycle. (d) The national debt always implies mortgaging our children's future and thus government should seek to retire as much of this debt as possible. (e) The part of the national debt that is owed to other parts of the national government should not be counted as a problem since it involves the government owing money to itself.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter31: The Impacts Of Government Borrowing

Section: Chapter Questions

Problem 7RQ: Based on the national saving and investment identity, what are the three ways the macroeconomy might...

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		(a) In a situation of a sovereign debt crisis Keynesian macroeconomic policy is unavailable because the government is practically unable to borrow.
		(b) Balancing the national government budget each year is sound macroeconomic policy
		(c) It is possible and preferable to balance the national government budget over the business cycle.
		(d) The national debt always implies mortgaging our children's future and thus government should seek to retire as much of this debt as possible.
		(e) The part of the national debt that is owed to other parts of the national government should not be counted as a problem since it involves the government owing money to itself.