If deficit spending does not contribute to public investment and crowds out private investment,then
A)The rate of economic growth will decline,ceteris paribus.
B)The current generation will bear the total burden of the debt.
C)Future productive capacity will be enhanced.
D)The opportunity cost of the debt will be minimized.

Question

Quizplus · Accepted Answer

Deficit spending leading to crowding out private investment would reduce the growth rate of the economy as private investment contributes to economic growth.

If Deficit Spending Does Not Contribute to Public Investment and Crowds