CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

The portfolio balance approach asserts that in the long run, when a government's debt level becomes unsustainable, it will need to:
A. buy back its debt with newly created money.
B. sell its debt to domestic investors instead of international investors.
C. issue less debt and reduce taxes to continue its expansionary fiscal policy.
Explanation: The portfolio balance approach asserts that the government will need to either monetize its debt, or change its fiscal policy to be restrictive.

User Contributed Comments 0

You need to log in first to add your comment.