The New Classical View Argues That an Increase in Government

question 70

Multiple Choice

The new classical view argues that an increase in government debt will cause people to

• A)increase their current saving so they will be better able to pay the higher future taxes implied by the increase in the debt.
• B)increase their current consumption since the substitution of debt for taxes makes them wealthier.
• C)shift their savings to foreign banks where they will be more secure.
• D)do all of the above.

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Knowledge

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Pension Plans

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