Which of the Following Reasons for Maintaining Federal Budget Deficits

question 84

Multiple Choice

Which of the following reasons for maintaining federal budget deficits is inaccurate?

• A) Deficits boost domestic saving, which in the long run could promote economic growth.
• B) Deficits help reduce the size and duration of recessions through automatic stabilizers.
• C) Deficits are used to finance capital projects.
• D) Public spending through deficit financing wins support from voters.
• E) A federal budget deficit stimulates aggregate demand.

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Definitions:

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