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.

Question

Quizplus · Accepted Answer

Option B suggests that deficit spending can actually have a positive impact on future generations by boosting long-term economic growth. The other options all explain potential negative consequences of deficit spending on future generations.

Some Economists Believe That Deficit Spending Can Impose a Burden