Some Economists Believe That Deficit Spending Can Impose a Burden

question 9

Multiple Choice

Some economists believe that deficit spending can impose a burden on future generations. Which of the following does NOT explain the burden?

• A) Investment will be crowded out by an increase in current consumption.
• B) Deficit spending that is allocated to purchases leads to long-term increases in real GDP.
• C) Future generations will have a smaller capital stock that will reduce their wealth.
• D) Future generations will have to be taxed at a higher rate.

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