When the Government Borrows Funds in Order to Pay for Its

question 189

Multiple Choice

When the government borrows funds in order to pay for its current expenditures,

• A) the government will have to repay the borrowed funds within five years.
• B) the government can spend without having to increase taxes, either now or in the future.
• C) future taxes will have to be higher in order to pay the interest on the borrowed funds.
• D) the cost imposed on the private sector is virtually eliminated because taxes can remain constant.

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Definitions:

Anxiety

A mental health disorder characterized by feelings of worry, anxiety, or fear that are strong enough to interfere with one's daily activities.

Underestimate

To assess something as smaller or less important than it actually is; the act of valuing or judging something below its true value or potential.

Overestimate

To assess or regard something as more extensive, important, or capable than it actually is.

Marijuana

A psychoactive drug from the Cannabis plant, used both medicinally and recreationally for its psychoactive effects.