All Governments Face a Budget Constraint: None Can Spend More

question 20

Essay

All governments face a budget constraint: none can spend more than the sum of current government revenues plus the amount that creditors are willing to lend.Why,then,do government budget deficits matter?

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Definitions:

Bystander Effect

A social psychological phenomenon in which individuals are less likely to offer help to a victim when other people are present.

Social-Responsibility Norm

An expectation that people will help those needing their help.

Kitty Genovese

A woman whose 1964 murder in New York City became a symbol of urban apathy, leading to research on the "bystander effect."

Bystander Effect

A social psychological phenomenon where individuals are less likely to offer help to a victim when other people are present.