In the Long Run, a Higher Government Deficit Does NOT

question 84

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:

Niche Marketers

Businesses or persons specializing in targeting and serving a specific segment of the market with particular products or services.

Poor Planning

Inadequate preparation or foresight, often leading to failures or suboptimal outcomes in projects or activities.

Unmotivated Owners

Refers to individuals who possess ownership in a business but lack interest, enthusiasm, or the drive to actively engage, lead, or improve the venture.

Government Loans

Financial sums lent to individuals or entities by government bodies, often with lower interest rates and longer repayment terms than private loans.