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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Definitions:

Inflammatory Response

The body's defense mechanism against infection or injury, resulting in redness, heat, swelling, and pain.

Scab Formation

The process of forming a scab, where blood clots and dries on a wound to protect it from infection and facilitate healing.

Atherosclerosis

A condition characterized by the hardening and narrowing of the arteries due to the buildup of plaque on artery walls, which can lead to cardiovascular diseases.

Arterial Walls

The layers of tissue that form the structure of arteries, responsible for maintaining blood pressure and flow.