The government's current spending and taxation policies cannot affect the

Question

Quizplus · Accepted Answer

The existing stock of government debt cannot be affected by current spending and taxation policies, as it represents the accumulation of past deficits and surpluses. Current policies can only affect the primary budget deficit, annual budget deficit, and size of transfers. The change in the stock of government debt is also affected by other factors such as interest rates and economic growth.

The Government's Current Spending and Taxation Policies Cannot Affect the