Asked by Vukosi Ellon on Jun 18, 2024
Verified
Which statement is true?
A) The United States Treasury will probably go bankrupt within 10 years.
B) Because the national debt grows each year,we have to pay more and more interest on the debt;because interest payments keep rising,our deficits keep growing,further pushing up the debt.
C) The United States Treasury can never go bankrupt.
D) None of the choices/statements are true.
Treasury Bankrupt
A situation where the government's treasury exhausts its funds, unable to meet its financial obligations.
Interest Payments
Payments made to lenders as a return on borrowed capital, typically expressed as a percentage of the principal.
Deficits
Occurs when an entity, typically a government, spends more money than it receives in revenue over a specific period, resulting in a shortfall that needs to be financed.
- Absorb the vastness and aftereffects of national indebtedness.
- Ascertain approaches to curtail and lessen governmental spending gaps.
Verified Answer
JE
Jahongir ErgashevJun 20, 2024
Final Answer :
B
Explanation :
This statement accurately reflects how the national debt can create a cycle of growing deficits and interest payments. The other statements are inaccurate - the US Treasury has never gone bankrupt, and it is difficult to predict financial outcomes 10 years into the future.
Learning Objectives
- Absorb the vastness and aftereffects of national indebtedness.
- Ascertain approaches to curtail and lessen governmental spending gaps.