Which of the Following Correctly Describes a Way in Which

question 22

Multiple Choice

Which of the following correctly describes a way in which deficit spending can impose a burden on future generations? I. Failure to allocate deficit spending to uses that boost future real Gross Domestic Product (GDP) will require taxing future generations at a higher rate to repay the resulting higher public debt.
II) Government deficits that lead to higher employment and real Gross Domestic Product (GDP) in the future will generate increased income taxes for future governments, which will respond by spending the higher tax revenues, creating higher future government budget deficits.
III) Other things being equal, deficit spending fuels increased consumption of goods and services by the current generation that crowds out capital investment, thereby leaving future generations with a smaller stock of capital than otherwise would have existed.

• A) I only
• B) II only
• C) I and III only
• D) II and III only

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Definitions:

Temperaments

Inherent traits of a person's character and personality that influence how they interact with the environment and regulate their emotions.

Effortful Control

The capacity to regulate one's behavior, emotions, and thoughts in the pursuit of long-term goals, often in the face of external demands or distractions.

Extraversion/Surgency

A personality trait marked by outward energy, sociability, talkativeness, assertiveness, and a high level of engagement with the external world.

Negative Affectivity

A personality trait characterized by a tendency to experience negative emotions such as sadness, anxiety, and anger more frequently and intensely than others.