Events such as wars not financed by increases in taxes, such as the U.S. Afghanistan and Iraq wars:
A) usually involve international borrowing and an increase in external debt.
B) can be paid for by transfers and gifts from sympathetic allies.
C) can be financed by increasing discount operations, thereby avoiding tax increases.
D) add to the instability of the international economy and create large spikes in GDP growth.

Question

Quizplus · Accepted Answer

Typically, wars that are not financed by increases in taxes involve the government borrowing money internationally, which increases the country's external debt. This can have negative effects on the country's credit rating and ability to borrow money in the future.

Events Such as Wars Not Financed by Increases in Taxes