The New Classical View of Budget Deficits Assumes That

question 69

Multiple Choice

The new classical view of budget deficits assumes that

• A)people view government bonds as an addition to their wealth.
• B)individuals do not anticipate the tax liability implied by deficit spending.
• C)increased government borrowing will raise the interest rate and retard private borrowing and capital formation.
• D)if future taxes (debt)are substituted for current taxes,people will save the reduction in current taxes in order to pay the higher future taxes.

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Definitions:

Evolutionary Psychology

A scientific approach in studying psychological foundations within the natural and social sciences, leveraging contemporary evolutionary perspectives.

Nature

The physical world and everything in it such as plants, animals, mountains, oceans, stars, and natural phenomena, unaffected by human intervention.

Nurture

The influence of external factors like environment, education, and experience on one's behavior and development.

Biological Influences

refer to the genetic and physiological factors that affect an individual's behavior, development, and health.