Which of the following is not true according to the classical view on public debt? (A) Public debt financing requires funds for interest payment and amortization, hence a double burden on tax payers. (B) Public debt financing supports compensatory budget policy as a tool for stimulating aggregate demand. (C) Public debt creates barren production and consumption and the burden is transferred to future generations. (D) Public debt destroys capital which otherwise could be used productively.

UGC-NET 2025 Question 4: Public expenditure and public debt

Which of the following is not true according to the classical view on public debt?

Tap an option to check your answer.

Checking your account…

Public expenditure and public debt has come up 29 times in 6 exams since 2012.

This question is on Public debt: burden, classification and crowding out, part of Public expenditure and public debt in Public Economics.

The classical and modern views of public debt and what it costs.

TestStop has 8 past-paper questions on this subtopic; the nearest in year are below.