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Economists Who Argue That the Government Need Not Balance Its

Question 60

Multiple Choice

Economists who argue that the government need not balance its budget make all of the following arguments except which one?


A) Budget deficits increase future growth because they transfer wealth from the present generation to future generations.
B) As long as the budget deficit is used to finance investment spending rather than current government spending then a budget deficit is quite acceptable.
C) Budget deficits will not become an increasing burden as long as they do not grow more quickly than a nation's nominal income.
D) Cutting the budget deficit means the tax burden on future generations can be lower; but if the deficit reduction is achieved by reducing spending on public services such as education then it may mean that younger generations have lower productivity, and so lower incomes, than would otherwise have been the case.

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