Consider the Government's Intertemporal Budget Constraint
Term a Is the ________, and Term B Is

question 73

Multiple Choice

Consider the government's intertemporal budget constraint: $\underbrace { G _ { 1 } + \frac { G _ { 2 } } { ( 1 + i ) } } _ { A } + \underbrace { ( 1 + i ) B _ { 1 } } _ { B } = \underbrace { T _ { 1 } + \frac { T _ { 2 } } { ( 1 + i ) } } _ { C }$ .
Term A is the ________, and term B is the ________.

• A) present discounted value of government spending; initial debt
• B) total annual spending; deficit
• C) initial period's spending; initial debt
• D) present value of government spending and taxes; present value of government spending
• E) None of these answers are correct.

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Definitions:

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