If the national debt is growing no faster than GDP,
A) the government will have to raise taxes
B) the nation's standard of living will fall
C) government investment spending will be negative
D) the government can pay interest on the debt without having to raise taxes
E) the government will be unable to pay interest on the debt

Question

Quizplus · Accepted Answer

If the national debt is growing no faster than GDP, it means that the economy is growing at a similar rate as the debt. This implies that the government can generate enough revenue to pay off the interest on the debt without raising taxes or cutting back on government investment spending. Therefore, the best choice is D, as the government can pay interest on the debt without having to raise taxes.

If the National Debt Is Growing No Faster Than GDP