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Federal debt causes a transfer of purchasing power from the private sector to the

A. industrial sector.
B. agricultural sector.
C. commercial sector.
D. public sector.

Please select the best answer from the choices provided.

Sagot :

GinnyAnswer

Final answer:

Federal debt results from government spending exceeding tax revenue, leading to a transfer of purchasing power from the private sector to the public sector.


Explanation:

Federal debt occurs when the government spends more than it collects in taxes and must borrow to cover the difference. This borrowing, also known as the government budget deficit, involves flows of money between the government sector and the financial sector. It leads to a transfer of purchasing power from the private sector to the public sector as the government borrows from financial markets to finance its activities.


Learn more about Federal Debt and Sectoral Transfers here:

https://brainly.com/question/34768570


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