According to Long-Run Projections,under Current Law

question 156

Multiple Choice

According to long-run projections,under current law,

• A) federal government spending as a percentage of GDP will rise gradually but substantially in the next several decades.
• B) federal taxes as a percentage of GDP will rise gradually but substantially in the next several decades.
• C) the federal government's budget deficit will gradually be eliminated in the next several decades.
• D) All of the above are correct.

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Definitions:

Disposable Income

The amount of money a household or individual has available to spend or save after taxes have been deducted.

Government Expenditure

The total amount of money spent by the government on various services and investments.

Discretionary Fiscal Policy

Government policy that involves altering government spending and taxation to influence the economy, based on current economic conditions.

Automatic Stabilizers

Structural features of government spending and taxation that reduce fluctuations in disposable income, and thus consumption, over the business cycle.