Question

One of the potential benefits of the borrowing that creates national debt is the ___________ that it can create if the money is invested wisely in public projects.

a) inflation (excessive right shift in AD)
b) economic growth (expanding PPF)
c) deflation (excessive left shift in AD)
d) none of the above

Answer 1

b) economic growth (expanding PPF)

Step-by-step explanation:

The national debt is the total amount of money that is owed by the government.

If money borrowed is invested wisely it can lead to economic growth. If money borrowed is used poorly, it can increase inflation.

I hope my answer helps you