Long- term budget deficits are bad for the economy for all the following reasons except:

Question

Quizplus · Accepted Answer

Long-term budget deficits are bad for the economy because they can lead to decreased investment spending, make it costlier for businesses to raise funds, and slow future economic growth. However, they are unlikely to lead to deflation, as deficits typically involve higher government spending and lower taxation, which can actually increase demand and create inflationary pressure.

Long- Term Budget Deficits Are Bad for the Economy for All