Answer to Question #190992 in Macroeconomics for Jess

Question

Which one of the following is most likely to increase the national debt?

A Foreign companies increasing their direct investment into the economy

B The central bank using its reserves of foreign currency to fund a trade deficit

C The government reducing its budget surplus by increasing its expenditure on infrastructure

D The government running a budget deficit, financed by selling bonds to foreign investors

Answer 1

D. The government running a budget deficit, financed by selling bonds to foreign investors.