Newspaper headlines often argue that the increasing public debt is a burden on future generations. What they mean is that

a. it makes predicting future unemployment levels unpredictable.
b. it causes deflation.
c. it reduces both nominal and real interest rates.
d. it reduces the current level of investment.

To understand the meaning behind the newspaper headlines arguing that increasing public debt is a burden on future generations, we need to break down each option:

a. Predicting future unemployment levels: Public debt may have some impact on unemployment levels, but it is not directly related to the burden on future generations. Therefore, option (a) is not the correct answer.

b. Deflation: Public debt can actually have an inflationary impact rather than deflationary. Governments often resort to borrowing money to stimulate the economy, which can increase inflation. Hence, option (b) is not the correct answer.

c. Nominal and real interest rates: Increasing public debt can have an influence on interest rates, especially if the debt causes a higher demand for borrowing money. However, it's important to note that the specific impact on interest rates can vary significantly depending on other economic factors. Hence, option (c) might be a plausible answer, but we cannot conclude it without further information.

d. Current level of investment: Increasing public debt can potentially impact the current level of investment. If the government has to allocate a large portion of its budget towards debt repayment or interest payments, it may reduce the funds available for investment in various sectors such as infrastructure, education, or research. This could lead to a reduction in the current level of investment and subsequently affect economic growth. Therefore, option (d) is the most likely answer.

To summarize, the correct answer is option (d) - increasing public debt reduces the current level of investment. However, it's worth noting that public debt can have complex and multifaceted impacts on various aspects of the economy, so understanding the full context is essential for a comprehensive analysis.