If the Long-Run Budget Constraint Is Upheld, an Investment Expenditure

question 153

Multiple Choice

If the long-run budget constraint is upheld, an investment expenditure will increase the present value of consumption only if:

• A) the present value of debt is equal to zero.
• B) the present value of output is greater than the present value of the investment expenditure.
• C) the present value of exports is greater than the present value of imports.
• D) output is increasing faster than the growth of population.

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Definitions:

Foreign-Born

Individuals who were born outside of the country in which they are currently living, excluding those born to parents stationed abroad as part of diplomatic or military service.

U.S. Population

The total number of people living in the United States, a figure that changes due to births, deaths, and migration.

Federal Deficit

The financial shortfall when a government's expenditures exceed its revenues within a given fiscal year, leading to the need for borrowing and debt accumulation.

Economic Recovery

The phase following a period of economic downturn or recession, characterized by a gradual improvement in the health of an economy, marked by increases in employment, consumer spending, and overall economic growth.