Increasing Government Debt Relative to GDP Does Not Cause Which

question 129

Multiple Choice

Increasing government debt relative to GDP does not cause which of the following?

• A) Crowding out
• B) An opportunity cost for the funds used to service the debt
• C) The possibility of higher taxes in the future
• D) Lower interest repayments relative to the size of GDP

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Definitions:

Profit Maximizing

A strategy or point at which a firm decides the price and output level that leads to the maximum profit.

MSB Curve

The Marginal Social Benefit curve, showing the extra benefit to society of producing one more unit of a good.

MCA Curve

A graphical representation showing the relationship between the amount of pollution abated and the marginal cost of abatement.

Emissions Standard

Regulations setting limits on the amount of pollutants that can be released into the environment by vehicles and other sources.