If Deficit Spending Does Not Contribute to Public Investment and Crowds

question 41

Multiple Choice

If deficit spending does not contribute to public investment and crowds out private investment,then

• A)The rate of economic growth will decline,ceteris paribus.
• B)The current generation will bear the total burden of the debt.
• C)Future productive capacity will be enhanced.
• D)The opportunity cost of the debt will be minimized.

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Definitions:

Gross Domestic Product

The total market value of all final goods and services produced within a country in a given time period, a key indicator of economic health.

Imports

Goods and services bought from other countries.

Double Counting

The fallacy of counting the same item or transaction more than once in economic calculations, leading to inaccuracies.

Gross Domestic Product

The total value of all goods and services produced within a country's borders in a specific time period, a primary indicator of economic health.