Other things equal, the stock of capital inherited by future generations is likely to be smaller when government spending
A)increases during a period of recession, rather than prosperity.
B)is primarily for capital-type goods.
C)is financed by borrowing.
D)is financed by taxation.

Question

Quizplus · Accepted Answer

When government spending is financed by borrowing, it can lead to higher national debt, which future generations will have to repay, potentially reducing the capital available for investment and growth.

Other Things Equal, the Stock of Capital Inherited by Future