Economics · Public debt
Which of the following is NOT true according to the classical views on public debt?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Debt financing requires funds for interest payment and amortization, imposing a double burden on the exchequer.
- 2Public debt facilitates productive activities and accelerates economic growth.✓
- 3Future financing becomes more troublesome due to accumulation of public debt.
- 4Public debt diverts resources away from productive private investment.
Correct answer
Public debt facilitates productive activities and accelerates economic growth.
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