Policies designed to pay off the national debt will result in:
A)A higher level of aggregate demand.
B)A redistribution of income but not wealth.
C)A smaller level of aggregate demand
D)Inflation.

Question

Quizplus · Accepted Answer

Policies designed to pay off the national debt typically involve reducing government spending or increasing taxes, both of which will lead to a smaller level of aggregate demand. This is because less government spending means less money flowing into the economy, and higher taxes mean people have less money to spend on goods and services. Neither of these actions will lead to inflation or a redistribution of income.

Policies Designed to Pay Off the National Debt Will Result