One Generally Recognized Problem of Large Government Budgetary Deficits Is

question 2

Multiple Choice

One generally recognized problem of large government budgetary deficits is

• A) that they crowd out private investment and lower U.S. exports.
• B) that the debt is primarily "owed to ourselves."
• C) the burden any current government borrowing inevitably imposes on future generations.
• D) the recessions that such government deficits simultaneously cause.
• E) the addition to our country's productive capacity as a result of the deficits.

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Definitions:

Insignificant Influence

A situation in which an investor does not have the power to govern the financial and operating policies of an investee.

Stock Investment

Purchasing shares of a company's stock to potentially earn dividends or sell at a higher price for profit, considered a form of investing.

Fair Value

An estimated market value of an asset or liability, based on current conditions and willing buyer and seller scenarios.

Insignificant Influence

Refers to a situation where an investor does not have the power to govern the financial and operating policies of an investee, typically resulting in the investment being accounted for using the cost method or fair value method.