In the Long Run, a Higher Government Deficit Does Not

question 24

Multiple Choice

In the long run, a higher government deficit does not affect equilibrium real Gross Domestic Product (GDP) , so that continuous increases in the government deficit will

• A)lead to greater tax revenues.
• B)reduce the price level.
• C)reduce spending on privately provided goods and services.
• D)increase the unemployment rate.

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Definitions:

Traditionalists

Individuals or groups who adhere to long-established customs, beliefs, or practices, often resisting change.

Baby Boomers

The demographic group born during the post-World War II baby boom, approximately between the years 1946 and 1964.

Generation X

Refers to the cohort of people born approximately between 1965 and 1980, known for their bridge between the baby boomers and millennials.

Generation Y

A demographic cohort following Generation X and preceding Generation Z, typically known for being born from the early 1980s to the mid-1990s.