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AP® Macroeconomics

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Fiscal Policy and Debt Retirement

APMACR-EBOKFI

Which of the following are issues associated with debt retirement of bonds when budget surpluses occur and the economy is at full employment?

I. Inflation may be higher
II. Public debt service increases
III. Interest rates may fall

A

I only

B

II only

C

III only

D

II and III

E

I and III