Deficit Spending and a Large National Debt Can Have Important

question 146

Multiple Choice

Deficit spending and a large national debt can have important effects on future generations because they

• A) make it possible for those living in the present to pass the opportunity costs of current government spending on to future generations.
• B) can significantly impact spending on capital formation.
• C) will pass interest obligations on to future generations with no corresponding benefits.
• D) will cause the government to go bankrupt.

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Definitions:

World Bank

An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.

Population Increase

An upward trend in the number of individuals residing in a specified area or country.

Real Per Capita

An economic measure that represents the inflation-adjusted income or wealth of an individual, considering the overall population, to determine living standards.

Absolute Gap

In economics, the total difference in economic indicators, such as income or wealth, between entities without considering size or proportion.